What is the Difference between Pre-Qualification and Pre-Approval?
Pre-qualification is the easier process of the two. This can be done on-line, faxed or over the phone. All you need to do is answer a few simple questions to the Mortgage company, such as how much money you earn, how much money do you owe, ect.
The Mortgage company will then give you a rough estimate of the loan amount you might qualify for.
Pre-approval is a more in-depth process. The mortgage company does a more intensive check of your financial situation, including your credit rating. This process is a more reliable estimate of the loan amount you would qualify for.
Pre-approved and pre-qualified buyers are preferred over those buyers who are not, by sellers. Sellers also tend to be more negotiable with pre-approved and pre-qualified buyers.
Knowing that getting a loan should not be a problem and the extra negotiating power makes getting pre-approved or pre-qualified worth the little effort it takes.
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