Pre-Qualified or Pre-Approved - Which is better?
Ultimately a pre-approval puts you in the better position to make a serious offer on a home.
Pre-qualification acts as a dry run of the loan application process. The mortgage lender will use details you provide about your credit, income, assets and debts to arrive at an estimate of how much mortgage you can afford. The whole process may take only minutes or a few hours and is free. Because the information you give is not verified it is also non-binding. Getting pre-qualified can be a good way to get a general idea of what you may be able to afford.
A lender's pre–approval is a commitment to loan up to a certain pre-determined amount. You become pre-approved when you apply for a loan. The lender checks credit, verifies employment, and often verifies that you have sufficient funds to close.
Obtaining a pre-approval is a very important piece of the home buying process, especially in a competitive real estate market. It strengthens your offer and negotiating position. A home seller will often choose an offer that is pre–approved for a mortgage over someone whose financial picture is still in question.
Here are some mortgage lenders our clients have worked with successfully.