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What’s the difference between being pre-qualified and pre-approved?

The key to lock in your Happy Home

We’re here to coach you on two financial terms you may hear often on your mortgage journey: pre-approved and pre-qualified.

While similar in concept and wording, the difference between the two can be the difference in locking in your new happy home—or not.

What you need to know about pre-qualification letters

You can use a pre-qualification letter to get an estimate from lenders on what price range and type of home you’ll likely be able to qualify for.

The quick facts:

  • It’s based only on the information you give to the lender. Since the information is not validated with documentation, it’s not a sure thing—just an estimate
  • A pre-qualification letter simply shows the amount you might expect to be approved for
  • There are typically no costs associated with pre-qualification letters
  • We can put together a zero obligation pre-qualification for you.

What you need to know about pre-approval letters

This is a more accurate estimate of how much you’ll be able to afford when you shop for a home. It also allows you to move faster through the mortgage process, so that when you do find a home, you’ve already done a lot of the legwork.

The quick facts:

  • It requires a more in-depth inquiry of your credit history and financial background
  • It shows how much a lender may approve you for, along with an estimate of what your interest rate will be
  • Lets you shop for a home at—or below—that price level
  • Gives you more confidence when making offers on homes

A Loanologist can help

Need more information? Call 855.410.1736 and of our Loanologists (Licensed Mortgage Loan Originator) will be happy to answer your questions as you start the mortgage process.

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August 21, 2018