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The Difference Between Pre-Qualification and Pre-Approval

posted by Stephen Katz @ 2:39 PM
Wednesday, May 3, 2017

Today, we’ll talk about the difference between getting pre-qualified and pre-approved for a mortgage. There’s a clear difference.

For pre-qualification, a buyer contacts a lender with financial information and the lender bases their decision off these numbers. This model relies heavily on information provided by the buyer directly. No pay stubs, W-2s, credit score report, or similar paperwork are involved for the lender to make this decision. While the buyer may still be honest with the lender, it’s not official.

For pre-approval, documentation is required to make a decision. This is what you really want. A buyer created a relationship with a lender by giving them required paperwork. There’s documentation attached to the information they provide. The lender has the opportunity to discuss a buyer’s work history and any debt to understand the loan. The lender then determines whether or not a buyer could afford a certain mortgage.

There’s a vast difference between the two processes! You’ll want a pre-approval letter over a pre-qualification as a buyer, however, both are helpful. If you’re not submitting paperwork, you are not pre-approved, but instead, only pre-qualified.

If you have any questions about this topic, or if you need mortgage assistance of any kind, please don’t hesitate to reach out to us! 770-824-9777

Stephen Katz

(770) 309-0939 (direct) or (866) 742-8400 -- For the past 18 years, Stephen Katz has built a successful business almost entirely on referrals. As your mortgage consultant throughout the home loan process, Stephen will explain the pros and cons of all available mortgage programs and help you choose the financing option that is best suited to your needs. Throughout the loan process, he will keep you informed and will respond quickly to your requests with answers and solutions. Consistently a top producer, Stephen is a Mortgage Bankers Association "Diamond" Award winner, a Georgia Mortgage "Top Gun" and has closed almost half a billion dollars in loans. Put his knowledge and experience to work for you!

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