Pre-Qualified Vs. Pre-Approved
If a lender pre-qualifies you for a mortgage it doesn't mean that you have been pre-approved for a home loan.
Pre-Qualification: This is the initial step in the mortgage process. You speak to a lender about your overall financial health, including your debt, income and assets. After evaluation, the lender will give you an idea of the mortgage amount for which you will qualify. Pre-qualification is not very strong as it does not require a credit check and is only based on your word.
Pre-Approval: You'll complete a mortgage application including necessary documentation from certified sources. The lender will check your financial background and credit rating history. Based on the findngs, the lender will tell you a specific mortgage amount for which you are approved and provide an idea of the expected rates and terms.
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