There is a difference between being pre-qualified for a mortgage and being pre-approved.
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I’d like to take a minute to address a frequently asked question: “What’s the difference between being pre-qualified for a mortgage and being pre-approved for a mortgage?”
If you’ve been pre-qualified, it means your lender has only taken a cursory look at your financial information. While they’ve checked your credit score, for the most part pre-qualified means your lender has taken down your information and made a presumptive decision before they begin the rigorous process of verifying the information you’ve provided. In short, prequalified means you’ve spoken with a lender about your financial situation.
Being pre-approved shows sellers that you are serious and know your purchasing power.
If you’ve been pre-approved, it means your lender has gone through that verification process and has documented your finances. In addition to a credit check, they’ve taken the time to contact your employer and verify your income. In regard to your credit, pre-approved means your lender has looked deeper into your credit report than your score, having examined your bills to verify their accuracy and your credit history. When you are pre-approved, you are very close to being able to close on a home.
When we represent a seller, we are always looking for a pre-approval over a pre-qualification. While pre-qualification indicates a lender’s best guess, when a buyer is pre-approved for a mortgage it shows the seller that the buyer is more serious about closing and knows their purchasing power.
If you’d like us to answer any questions you have in a future video, or you’d like to talk to us about buying or selling a home, please contact me at (469) 338-4756 or online at sales@thepyronteam.com. I'd be happy to help you.
