What’s the difference between a pre-approval and a pre-qualification? I’ll discuss this question, and I’ll introduce a third option: a real pre-approval.
Usually, you would get a pre-qualification letter and then go on to get a pre-approval. Recently, lenders started changing the verbiage, which meant they would give out pre-approvals after a five-minute conversation.
A real pre-approval is a real process. You provide your bank statements, tax forms, and pay stubs, and an underwriter approves your application. An unskilled lender may give a pre-approval without going through this process, which leads to the buyer getting denied later on.
So, work with your real estate agent to find a reputable lender. Also, be aware that you’re not really pre-approved unless you’ve gone through the process. Watch out for those false pre-approvals.
If you have any questions, give us a call or send us an email. We look forward to hearing from you!