If you’re in the home buying process, you’ve likely been in touch with a lender or loan officer to determine your ability to secure a mortgage. It’s not uncommon to hear the terms “pre-approval” and “pre-qualification” used interchangeably, although they have a few distinct differences.
A pre-qualification is simply an estimate of a person’s ability to purchase a home. Typically, lenders rely on verbal information supplied to them by the borrower — no documentation needed! Additionally, lenders typically do not check a borrower’s credit score. While it’s not the most accurate estimate of a borrower’s ability, there is certainly merit to a pre-qualification! It’s a great first step for first-time buyers who are just beginning to search for homes.
A pre-approval essentially takes the pre-qualification process one step further by verifying the information and checking a credit score. Since documentation is required, getting pre-approved can take a little bit longer, but it’s worth it when it comes time to submit an offer! Sellers are more likely to seriously consider offers from buyers who are pre-approved, as it shows that you are a committed buyer with the financial ability to purchase the home.
Interested in getting pre-qualified, pre-approved, or meeting with lenders? Give us a call at (215) 699-5555. We’d love to introduce you to a few friendly, helpful and local loan officers.