First-Time Home Buyers

Pre-Approvals vs Pre-Qualifications

The Most Common Misunderstanding of the mortgage process is the Pre-Approval vs Pre-Qualified debate. What is what?

Pre-qualified is when someone completes a mortgage application with a mortgage broker or a bank representative and is told how much they can afford.

Pre-approved is when someone has written confirmation from a lender stating they are willing to lend based on what is stated in an application and the applicant’s current credit history.

So what is the difference?

Pre Qualified
  • opinion based
  • more outlook vs exact
Pre- Approval
  • lender willing to lend
  • an actual confirmation of how much will be loaned
  • typically come with a 120 day rate hold

You must always get yourself pre-qualified before you begin looking at homes so you know what you can afford