Getting pre-qualified helps determine how much home you can afford, based on specific financial information you share with your lender. The information is not verified, so there is no guarantee you will qualify for the loan amount. Getting pre-approved requires verification of your financial information, and does serve as a commitment to lend a specified amount based on that verified information. This gives you significant buying power with a seller who recognizes you will be approved for a loan.
What Is Pre-Qualification?
Pre-qualification is an informal discussion between borrower and lender. The lender estimates the amount that you can borrow based solely on what you tell them about your income and assets. The lender does no verification and is not bound to make the loan when you're ready to buy. On the other hand, loan pre-approval is based on documented and verified information regarding your employment, your income, your liabilities, your assets and the cash you have available to close on a home purchase.
To get pre-qualified, click here.
How Is Pre-Approval Better?
To a seller, a lender's pre-approval letter is considerably stronger than a pre-qualification letter. If a seller knows your financing is secure, your offer is stronger. Pre-approval also gives you peace of mind as you shop for a home, knowing that you will qualify for the proper mortgage amount.
To get pre-approved, click here.
How Much Might Your Monthly Mortgage Payments Be?
To find out, use our handy mortgage calculator. Click here.