If you are in the market for a new home, then you have probably heard the terms “pre-qualified” and “pre-approved.” But what do they mean? And which one should you aim for? In this blog post, we will break down the difference between pre-qualified and pre-approved mortgages, so that you can make an informed decision about which one is right for you.
Pre-qualified mortgages
These mortgages are based on the information you provide to the lender, such as your income, debts, and assets. The lender will use this information to give you a general idea of how much they are willing to lend you. They will also tell you what kind of interest rate you can expect to pay. Keep in mind that this is only a general idea and is not based on a detailed analysis of your financial situation.
Pre-approved mortgages
These mortgages are based on a more thorough analysis of your finances, including a credit check. With a pre-approved mortgage, the lender will give you a specific interest rate and loan amount that they are willing to lend you. This is based on a more detailed analysis of your financial situation and is a more accurate estimate of the loan amount you will be able to qualify for.
So, which one should you aim for? If you are just starting to look for a home, then pre-qualified mortgages can give you a general idea of how much you can borrow and what kind of interest rate to expect. If you are further along in the home-buying process and have found a home that you are interested in, then you will want to get pre-approved for a mortgage so that you know exactly how much the lender is willing to lend you and at what interest rate. Either way, it is always a good idea to shop around and compare mortgage offers from multiple lenders before making a decision.
We hope this blog post has helped to explain the difference between pre-qualified and pre-approved mortgages. If you have any further questions, please don’t hesitate to contact us. We would be happy to help!
