What is the difference between being pre-qualified for a loan and being pre-approved?
Imagine you’re a seller with multiple purchase offers. Let’s consider the type of buyers you may be dealing with: Buyer One is neither pre-qualified nor pre-approved. This buyer provides no evidence of being able to afford to purchase your property. You may wonder how serious they are. Buyer Two is pre-qualified. This buyer has met with a mortgage broker (or lender) and provided that broker with general information regarding income, expenses, assets and liabilities. The broker may also have seen a credit report. The buyer gives you a letter from the broker stating an opinion about what the buyer can afford. Buyer Three is pre-approved. This buyer has completed a loan application, providing a broker or lender with written evidence of income, expenses, assets, liabilities and credit. All information has been verified by a lender. As a result, much of the paperwork for this buyer’s loan has been completed. This buyer will probably be able to close quickly. You have been provided with a le
