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What is the difference between a pre-qualified and a pre-approved mortgage?

April 26, 2017difference mortgage pre-approved pre-qualified

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What is the difference between a pre-qualified and a pre-approved mortgage?

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Pre-Qualified is merely an assessment that you may qualify for a mortgage loan and is the result of the data you supply, and does not consider the other data a lender may have access too. It holds no real weight and is a marketing technique used by lenders to have potential loan applicants consider doing business with them. Pre-approval is vastly different. It means that the lender, after considering your application and all available data, has made a formal commitment to grant you a loan for a specific amount of money. This allows you to shop with confidence for homes in your price range. In simple words the pre-approval letter tells the seller that you have the financial means to buy their house.