RE Articles > Preapproved Vs. Prequalified - What's the Difference?


ApprovedWhat's the difference between being preapproved and prequalified?

 

First-time buyers frequently assume being pre-qualified and pre-approved for a mortgage are one and the same. This common mistake can lead many buyers to regard their applications with unrealistic expectations. Applying for a pre-approved mortgage will help you find the right home by giving you an idea of exactly how much money you have to spend, and give you the confidence to negotiate effectively. 

 

Pre-qualification is a simple assessment of your income, debt and available capital, which is used to give you a rough estimate of your loan. Pre-approval, on the other hand, requires the evaluation of tax records, income statements, and other personal financial information to determine a much more accurate idea of what is available to you. Most realty professionals recommend going through the pre-approval process before shopping for a home, as knowing the details of your loan in advance will drastically increase the efficiency of your search.

 

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David Hill

 

 

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