The difference between being pre-qualified and pre-approved is simple:
If you are pre-qualified it means that you POTENTIALLY could get a loan for the amount stated to you, assuming that all of the information given was accurate and true.
If you are pre-approved, it means that you have undergone the extensive financial background check – which includes looking at your credit history, previous tax returns and verifying your employment – and the lender is willing to give you a loan. You’re APPROVED! So, they give you a letter that states such and it is valid for approximately 60 days thereafter.
Most sellers prefer buyers that have been pre-approved because they know that there will not be any problems with the purchase of their home.
I will also add that applying for a mortgage or getting pre-approved – even if you shop around and have multiple reps run your credit – does not negatively impact your credit report. I promise.
I work with Brian Wagenseller of Wells Fargo and Lisa Ciasulli of Weichert Financial Services. Click here to request their contact information.
