What’s the difference between pre-qualification and pre-approval?

Both pre-qualification and pre-approval help you see what your mortgage could look like and estimate how much house you can afford, but they have some important differences.

Pre-qualification

Pre-qualification uses self-reported information (like your stated income) to provide a rate quote. Because the lender doesn’t verify whether the numbers you provide are accurate, prequalified rates are rough estimates only. Prequalifying only involves a soft credit check, so it does not affect your credit report and won’t show up on your credit history.

Pre-approval

Pre-approval, on the other hand, is like a “dress rehearsal” for your mortgage application. You’ll provide financial documents like pay stubs and bank statements, and the bank or lender does a hard credit check to verify your credit history. As a result, pre-approvals do affect your credit score, although usually by just a few points. Don’t let that deter you, though. A pre-approval letter shows you’re a committed buyer with sufficient purchasing power to close the deal.

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I met Mr Hyde in 2017 while searching for someone to help my sister in law who was in a financially challenging position
I was referred to Lamont Hyde from a neighbor of mine who had used him to purchase her home a few years back. My mother had past away a few months
My wife & I never thought we could afford to own our home. We were currently living with my mother since being married 8 years ago.
Lamont Hyde Broker / Owner of THG Realty & Loans

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