Don't get pre-qualification and pre-approval confused; here's some info on the differences between the two:
- Pre-qualification is usually free.
- Provides and estimate of your buying potential.
- A Lender or Broker will review your credit report, earnings & savings, debt, and other information to get an estimate of the amount of mortgage the borrower will qualify for. This usually is based off of documents the borrower has on hand, or from what the borrower tells the lender.
- Takes from 20-30min to 24-48hrs, depending on the persons work load.
- Some, not all, lenders charge you the nominal cost of your credit report in order to get pre-approved.
- The lender will verify all provided information of employment, assets, and income.
- In return the lender will provide a letter of mortgage approval for a certain amount to the borrower.
- Pre-approval can also speed up the process of coming to a final purchase price with the seller.
I'm a mortgage consultant serving CA, FL, MA, NH