The 8 Key Steps to Homeownership
Step 4 - Choose Your Loan Program > Pre-qualification vs Pre-approval
Loan Pre-qualification vs Loan Pre-approval:
A loan pre-qualification is typically an estimate as to the amount you may qualify for based on what you tell a Lender. Usually, very little of the information you have told the Lender has been verified at this time. The Lender may request your approval to pull your credit report but, can also use a current copy of the report, if you have one. This is just an estimate. A pre-qualification has not been underwritten by the bank!
A loan pre-approval results in a written loan commitment following a mortgage application and verification of your debt and assets. It is always best to be pre-approved prior to beginning your home search process. That way you will know the loan amount you are approved for and the amount of cash that will be required from you. Very few sellers will consider an offer that is not accompanied by a loan pre-approval letter.