Pre-approved versus pre-qualified?
Getting pre-qualified is fairly simple. You provide an overall financial picture of your debts, income and assets and the lender or broker can give you an idea of the mortgage you would qualify for. At this point no credit report has been pulled. When it comes time to be approved, the options presented previously may not be available to you.
Getting pre-approved is the next formal step to obtaining financing. An official mortgage application would be completed and supporting documents to your financial background and credit rating would be provided. Based on the documents supplied a lender can tell you more specifically the amount, terms and conditions you would be approved for. You may be able to lock in this rate for when you find that perfect home at or below that price level.
Once you find that perfect home your pre-approval can turn into an approval and you would fulfill the conditions like ‘confirmation of down payment’ and ‘written employment and income confirmation’.
For this reason, most successful Realtors will want to ensure you have a pre-approval in place before showing you homes that are not within your price range.