These two terms sound alike, but they carry very different weight when you make an offer.
Pre-qualification
This is a quick estimate of what you might be able to borrow, based on information you share. It is a good first step, but it is not verified.
Pre-approval
A lender reviews your income, assets, debts and credit, and gives you a letter stating how much they are willing to lend you. This is much stronger.
Why pre-approval matters
Sellers take your offer more seriously.
You know your real budget before you fall in love with a home.
It can speed up the process once you are under contract.
What to gather
Recent pay stubs and W-2s or tax returns.
Bank statements.
A list of monthly debts.
Your ID.
A few tips
Do not make big purchases or open new credit while you are house hunting.
Keep the letter up to date, since it expires.
Talk to more than one lender and compare.
I work with lenders I trust and I am happy to introduce you. Start with a pre-approval and we will build a plan from there.
