Pre-approval vs. pre-qualification – the basics
It’s one of the most popular questions I get.
“What’s the difference between pre-approval and pre-qualification?”
Let’s ask the experts!
Michael L. Moskowitz, president of Equity Now, says that pre-qualification means, “based upon income, asset, liability, and personal information a borrower has provided, a lender will indicate how much of a mortgage the borrower should be able to get at a particular interest rate.”
Pre-approval is more serious.
With a preapproval, he said, the borrower submits a mortgage application to the lender “along with any required income verification information” and the lender runs a credit check on the borrower and processes the application. After that, the lender gives the borrower a written approval for the maximum amount of money the borrower qualifies for at a specific interest rate.
What’s better? A pre-approval, of course. In fact, it’s almost a rule that a pre-approval letter accompany any offer for a property.
So, do it now!
Source: Prequalification vs. Preapproval – By Jay Romano, The New York Times
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