Pre-qualification

Prior to your loan application meeting and the start of your search for a new home, you may want to speak with your lender to get pre-qualified for a loan. A pre-qualification is an unofficial estimate of the home you can afford.

Pre-Approved Loan

You also have the option to get pre-approved for a mortgage loan. Getting pre-approved means that a lending institution has processed your loan application and approved a specific mortgage amount. Lenders use a series of qualifying guidelines to determine what size of loan you and any co-borrowers can get.

Here's some additional information to explain the differences between pre-qualification and pre-approval of your loan:

Pre-Qualification

• Is based on preliminary information regarding your income, debts and assets.
• Information is usually provided verbally to the lender by you.
• An in-file credit report may or may not be reviewed.
• Once a purchase agreement is executed, you must complete a loan application.
• There's no fee.

Pre-Approval

• You provide documentation of income, debts and assets.
• Your loan application is completed.
• The information you provide is verified and an underwriter approves the loan.
• There's no need to complete an application once the purchase agreement is executed because it's already done.
• You may be required to make a deposit on closing costs.
• Your mortgage loan is approved, pending an appraisal of the home.