Here are the main differences between pre-qualification and pre-approval.
Buyers often don’t know the difference between a pre-qualification letter and a pre-approval letter, so today I’m briefly explaining the differences.
When you go online to fill out a mortgage application, you usually only get a pre-qualification letter. With this letter, very little has been done; they haven’t even pulled your credit. That by itself could eliminate a buyer from the field.
A pre-approval letter carries more weight because the buyers have put in the extra effort to turn over things like pay stubs, bank information, and W-2 statements. Buyers also allow a credit check to be done, and they are asked for a specific down payment amount.. Yes, it’s more work to get a pre-approval, but it lets the sellers know you’ve put more effort into becoming a solid buyer. So if you’re up against a buyer that only has a pre-qualification letter and you have a full pre-approval, the seller is much more likely to accept your offer.
“With a pre-qualification letter, very little has been done.”
We’re here to walk you through the differences between these two letters or any other questions you have. So give us a call or send an email; we’d love to help you.