Understanding the Difference Between Pre-qualification and Pre-approval
Published On August 6, 2019
You may have heard about getting “prequalified” for a mortgage or getting “preapproved” for a mortgage. Since they sound similar and are used interchangeably by people in the industry, this can get confusing. Both can be helpful and important steps in the process of getting approved for a mortgage but there are some crucial differences between the two that’s why it is important to understand the difference between pre qualification and pre approval.
Pre Qualification First and then Pre Approval
Getting into the pre qualification or pre approval process is a smart move when you’re at the very beginning of the home purchase process, as it gives you an informal estimate of the loan amount you may be approved for. This is really helpful in determining your budget for a new home. It can also alert you to any potential issues that may prevent you from getting approved for a mortgage, so that you can work to address those issues before you go too far down the path of looking for a new home. To get prequalified, you just need to give some basic financial information to a lender.
Pre Approval
Getting the pre approval for a mortgage is similar to getting the pre qualification, but it is more in-depth and is more official, which makes it more valuable if you’re serious about buying a home. Many sellers will want to see a mortgage preapproval letter as proof that you’re serious. The preapproval process will also give you more detailed information about your financial situation and creditworthiness, and by the end of the process, you’ll learn about your loan options. In order to get preapproved, you need to give a lender detailed information about you and your finances, such as proof of ID, W-2 forms, and pay stubs. The lender will also perform a credit check. Once they determine how much you can be approved for, you will receive a letter documenting this information, and that letter will be valid for 60-90 days. This letter isn’t a guarantee, but it is a very helpful tool in the home buying process.
So even if you’re only just starting to think about home ownership, getting prequalified is a great first step. If you’re getting more serious about wanting to purchase a home, getting preapproved is the way to go, so you have a solid understating of the financials and are a more attractive buyer.
If you have any questions about getting the pre qualification and pre approval, get in touch with our team – we’re happy to help. If you are ready to get started, we’ll guide you through the process!
BluPrint Home Loans is a Division of NFM, Inc. dba NFM Lending, NFM NMLS #2893. NFM is an Equal Housing Lender. Some products and services may not be available in all states. Licensing and disclosure information can be found at https://nfmlending.com/licensing/
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BluPrint Home Loans is a Division of NFM, Inc. dba NFM Lending, NFM NMLS 2893. Licensing and disclosure information can be found athttps://nfmlending.com/licensing and https://nfmlending.com. NFM is an Equal Housing Lender. Some products and services may not be available in all states. Make sure you understand the features associated with the loan program you choose, and that it meets your unique financial needs. Subject to Debt-to-Income and Underwriting requirements. This is not a credit decision or a commitment to lend. Eligibility is subject to completion of an application and verification of home ownership, occupancy, title, income, employment, credit, home value, collateral, and underwriting requirements. Not all programs are available in all areas. Offers may vary and are subject to change at any time without notice. (http://nmlsconsumeraccess.org). We value your opinion and we thank you for visiting this website or NFM, Inc. If you have specific questions, comments or concerns we encourage you to email us at hello@dev.bluprinthomeloans.com. Emails received during business hours, should receive a response within 48 hours, excluding weekends or holidays.
BluPrint Home Loans is a Division of NFM, Inc. dba NFM Lending, NFM NMLS 2893. Licensing and disclosure information can be found athttps://nfmlending.com/licensing and https://nfmlending.com. NFM is an Equal Housing Lender. Some products and services may not be available in all states. Make sure you understand the features associated with the loan program you choose, and that it meets your unique financial needs. Subject to Debt-to-Income and Underwriting requirements. This is not a credit decision or a commitment to lend. Eligibility is subject to completion of an application and verification of home ownership, occupancy, title, income, employment, credit, home value, collateral, and underwriting requirements. Not all programs are available in all areas. Offers may vary and are subject to change at any time without notice. (http://nmlsconsumeraccess.org). We value your opinion and we thank you for visiting this website or NFM, Inc. If you have specific questions, comments or concerns we encourage you to email us at hello@dev.bluprinthomeloans.com. Emails received during business hours, should receive a response within 48 hours, excluding weekends or holidays.