Learn The Difference

Qualified Or Approved

You have probably heard the terms "pre-approved" and "pre-qualified" when shopping for a home. So, what is the difference between someone who is "pre-approved" for a loan and someone who is "pre-qualified"?

"Pre-qualification" is an estimate of borrowing power. It is a statement from your lender saying "based on your income & debt" you are qualified for a mortgage of some dollar amount. The mortgage company may run a credit report or even ask for proof of income.

"Pre-approval" is one step beyond qualification. Here you have actually sat down with the lender, supplied him with your last 2 years income tax returns, bank statements, W2's, etc. The mortgage company has asked about your employment & also runs a credit report. The difference comes with the next step. The mortgage company submits all your paperwork and application to an underwriter. The underwriter issues an "approval" subject to the property (appraisal and title).

Getting a pre-qualification letter is easy. Granted, a pre-approval is more time-consuming (and possibly more stressful) than a pre-qualification. The additional due diligence is exactly why the pre-approval carries more weight.

Some mortgage companies use these terms interchangeably. They are not the same. If someone says that they can pre-approve you over the phone or in a few minutes you are most likely not pre-approved.

Deseret Peak Mortgage will pre-qualify you to get the ball rolling. We can also give you the real bargaining power of pre-approval. Contact a loan consultant and find out how easy it can be.