Pre-approval, on the other hand, is more official. Borrows who pursue loan pre-qualification may receive a pre-qualification letter which they can share with real estate agents or home sellers as proof that they are working with a licensed lender. Pre-qualification is essentially a ball-park estimate. Lenders may be willing to accept self-reported information rather than requiring official documentation or performing a check on your credit history. Mortgage pre-qualification is a less conclusive process. Pre-ApprovalĪlthough the terms pre-qualification and pre-approval are sometimes used interchangeably, they are not exactly the same thing.

You and your real estate agent can then use this informal evaluation to refine your search to properties that are within your expected budget range. However, it’s important to recognize that when it comes to pre-qualification, mortgage lenders are not guaranteeing that you will be approved they are only verifying your ability to take on mortgage payments and giving you a clearer idea of how much of a mortgage you may be able to afford.

You may also wish to take this opportunity to become more familiar with your mortgage options, and to get a tighter rein on your budget. The lender will review your financial history and possibly take a look at some relevant documentation and provide you with an informed estimate of how much money you may be able to borrow. Mortgage pre-qualification involves working with your lender to determine how much a home loan you can afford. What Does It Mean to Pre-Qualify for a Loan? As you prepare to purchase a mortgage, one of your first steps might be to pre-qualify for a home loan. For most homebuyers, this includes securing a home loan. Of course, before you get to experience the joy of unlocking your front door for the very first time, there are some tasks that you’ll need to take care of along the way. Purchasing a home can be an exciting journey. First Step to Homebuying: Pre-Qualify for a Home Loan

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