Free Home Value Report Search For Homes

Expert Tips for Navigating the Real Estate Market

My mission at the Smits Team Real Estate is to be your best resource for real estate advice. Whether you are a buyer, seller, or investor, I can answer any questions you might have about real estate. Subscribe to this blog to get the latest news on local market trends and receive expert tips for buying or selling a home.

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

Buying a home? Click here to perform a full home search
Selling a home? Click here for a FREE Home Price Evaluation 
Call me at (970) 418-0183 for a FREE home buying or selling consultation

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.