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Pre-Qualification Versus Pre-Approval

what is mortgage preapprovalThere are two forms of proof you can obtain from your lender that show real estate agents and sellers that you’re financially prepared to buy a home. Learn the differences between each so you can make a solid decision as to what’s going to add to your buying power.

Pre-qualification

  • Lender provides opinion about your ability to qualify
  • Estimate of loan amount and rates provided
  • Usually written, but not contractual
  • No financial information verified by credit bureaus
  • No thorough financial background check by lender

Pre-approval

  • Lender verifies financial standing
  • Certificate provided stating that borrower would qualify given current standing
  • Does not guarantee rates and terms promised

The main advantage to pre-qualification is the process is much faster. However, if you’re like the average buyer, who does not have a 20%+ down payment or excellent credit, a pre-approval letter will often be worth the wait.

Give us a call if you have additional questions about pre-qualification or pre-approval.

 

 

Today's Low Rates

PROGRAM RATE APR
30 Year Fixed 3.875% 3.93%
15 Year Fixed 3% 3.06%
5/1 Arm 3.5% 3.672%
All rates shown with 0 points
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