What is the difference between a prequalification analysis and a preapproval application?
A prequalification analysis is typically the result of information shared between a mortgage lender and a potential mortgage borrower and usually does not incorporate information obtained from a credit report. The end product for a prequalification analysis will be a “ballpark” estimate of the maximum mortgage amount for which you may qualify. Typically there is no cost or commitment on behalf of either party for a prequalification analysis. A mortgage loan preapproval application typically results in a written loan decision following a complete mortgage application. Many lenders will require an application fee. You can typically apply for a preapproved mortgage prior to signing a purchase agreement for a home. Many lenders will also allow you to lock your pricing at the time you apply for a preapproved mortgage. A preapproval can also add to your negotiating strength when you are ready to make an offer on a home.
