What's the Difference Between Pre-Qualification and Pre-Approval?



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Today we'll discuss the difference between a pre-qualification letter and a pre-approval letter. 

A pre-qualification letter is very easy to attain.  You simply call a lender and tell them your name, address, social security number, and how much money you think you have. The lender runs a credit report, and then, based on just that small amount of information, they type up a letter saying that you are pre-qualified. 

In order to get a pre-approval letter, you have to go through a real process. You provide your taxes, paystubs, and bank statements, and they run a credit report. When we send a pre-approval to a seller, they know that the lender is sure that you are truly approved to buy a home. 


In our current market, we're starting to see multiple offers and a lot more competition. Having a pre-approval letter puts you far ahead of other buyers who only have pre-qualification letters. 

We do ask our clients to get pre-approval letters while we're out looking at properties. That way, when we find you the right home, we know that we are ready to put in a strong offer. 

Whether you're getting a pre-qualification or pre-approval letter, it is typical that you would pay for the credit report. However, this is the only cost to our buyers. 

If you would like to get a pre-approval letter before looking at properties, give us a call for a list of our preferred lenders. 

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