What is the difference between Prequalification and Preapproval?
Prequalification is based on data the consumer submits and is not necessarily verified. A credit report is typically not pulled and the lender is just giving the buyer an idea of what they may qualify for.
A preapproval carries much more weight and is more of a commitment from the lender for a mortgage loan. With a preapproval a loan application is completed, a credit report is pulled, and the income and assets are verified. This allows a buyer to get a preapproval letter from the lender which they can give to their realtor. This preapproval letter is submitted with any offer that is made on a home.
Please reach out with additional questions or scenarios if you are looking to get prequalified or preapproved to buy a home!
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