Are you confused about what getting pre-qualified or pre-approved for a home loan means?

There is a huge difference between a pre-qualification and a pre-approval. Let me explain.

Getting pre-qualified and pre-approved for a home loan should be your very first step regardless if you are buying a home or refiancing. When you are buying a home, even the Realtor will ask you, are you already pre-qualified or pre-approved with a loan officer? This one question will immediately let them know where you are in the home buying process and in what direction they will need to go in next.  

Understanding the distinction between being pre-qualified for a loan and pre-approved for a loan is extremely important. The difference between the two terms will be crucial when you decide to make an offer on a house.

Getting Pre-Qualified for a Home Loan

Getting pre-qualified for a loan will help give you an idea of how much of a home loan you may be able to qualify to borrow.

When you are pre-qualified for a home loan the loan officer only has your word in regards to your assets, credit, employment history, income and liabilities and no information has been verified. 

It is extremely important to understand that a pre-qualification is just an estimate of what you are eligible to borrow and is not a commitment to lend.

Getting Pre-Approved for a Home Loan

Getting pre-approved for a home loan is your way of showing your Realtor and the seller of a property that you are a serious buyer and ready to make an offer to purchase.

When you are pre-approved for a home loan the loan officer has received the required documents from you and has verified your assets, credit, employment history, income and liabilities discussed earlier.