What is the difference between pre-qualifying and pre-approval for a mortgage?

Pre-qualifying and pre-approval for a mortgage are two different things. Pre-qualifying is the first step in the mortgage process, and it is when you provide information to a lender about your income, debts, and assets. The lender can use this information to give you a rough estimate of how much you can afford to borrow. This information is only used to determine your eligibility; it does not guarantee approval for a loan. On the other hand, pre-approval is a more thorough assessment of your financial situation. The lender looks at your credit score and other financial information to determine what kind of loan you can get. If you are approved, you will receive a letter of pre-approval which lets you know that you are eligible to purchase a home up to a certain price. This is important to have when you start looking for a home, since it can give you a better idea of what you can afford. In Pennsylvania, a pre-approval letter is the only way to guarantee that you are eligible for a mortgage. It is important to be aware of the differences between pre-qualifying and pre-approval before beginning the mortgage process.

Related FAQs

What is a bi-weekly or accelerated mortgage payment plan?
What is a "point" on a mortgage?
What are the risks associated with a mortgage?
What is the effect of pre-payment penalties on a mortgage?
What is a first mortgage?
What type of mortgage should I choose?
What is interest rate?
What is the role of the mortgage broker in the mortgage process?
What factors determine the mortgage rate?
What is a mortgage payment?

What is the difference between pre-qualifying and pre-approval for a mortgage?

Related FAQs

Related Blog Posts