Pre-approval vs. pre-qualification

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In today’s competitive market, buyers need to think ahead about what they can do to stand out from the crowd. One of the most important ways to do this is to show that you are financially qualified to buy the home you’re making an offer on in the first place. This is typically done with a letter from a lender that can be submitted along with an offer showing that you have been either “pre-approved” or “pre-qualified” for a loan of a certain value. But what is the difference?

Pre-qualification is the less extensive process of the two and can usually be fully completed over the phone, and sometimes even online. It usually involves providing the lender’s representative with basic information about your income, assets, and debts (including current house, car, credit card, and student loan payments and balances). The related letter says that based on your reporting of these…

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