What is the difference between being “pre-approved” and “pre-qualified”?
To “pre-qualify” an approved lender, after discussions with a purchaser, can estimate approximately how much of a mortgage the purchaser can actually afford (this is not a guarantee, as the purchaser must then make a formal application for an actual approved mortgage). For a “pre-approval” the purchaser will complete a formal application with a credit and job history, being examined by the lender. This information provides the lender with information that will enable him to make a firm commitment as to the amount of the mortgage, the interest rate, terms, etc. Being “pre-approved” also shows the builder that you are a serious buyer with the financial means to purchase the home.
