Pre-qualification versus Pre-approval
Pre-approval. Getting pre approved is much more involved. You will complete an official mortgage application and may pay an application fee. You will then provide the lender with documentation to perform an extensive financial background check including pulling a credit report. You will also know what interest rate you will be charged on the loan. With pre approval, you will receive a conditional commitment, in writing, for a specific amount which gives you an advantage when dealing with a potential seller. It allows you to move quickly when you find a home to purchase. When you make an offer, it won’t be contingent on financing which is a plus in a competitive market.