Pre-Approval vs Pre-Qualification

Pre-Approval vs Pre-Qualification

It is important to understand the differences between a pre-approval and a pre-qualification as this is one of the most important steps in the house hunting process as there’s nothing worse then putting an offer on a house only to find out you don’t really qualify.

 

Pre-Qualification

is an estimate of how much you may qualify for based on the information you provide. In some situations a credit score may be checked, but in many cases it is not.

Pre-Approval

is an accurate assessment of how much you qualify for based on your verified income, a credit report analysis, detailed assets and debts review, and confirmation of down payment. If you are serious about buying a home, then you really owe it to yourself to get pre-approved.

Why get pre-approved?

By getting pre-approved you will be able to know the exact maximum purchase price that you can afford, saving you time as you will now know which homes fall within your budget when browsing. This also results in a quicker turnaround time on processing your approval once you have put in an offer on your new home. Furthermore getting pre-approved also provides you security by holding you an interest rate for a given time in the case that mortgage rates should increase.

What we look at when pre-approving you for a mortgage?

  • Credit Report
  • Income statements
  • Current Debts
  • Down payment Amount