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.
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.