Pre-Qualification vs Pre-Approval
November 30, 2015
There is a difference between a pre-qualifiaction and pre-approval with lenders. And at the end of the day, it could mean the difference between being able to know if you are able to get a certain rate, or simply to have a general idea of what rates you might be able to afford (with absolutely no gaurentee).
With a pre-qualification, lenders will only get very basic information about your financial situation. This covers your montly income and debts, which allows the lender to get a general idea about what rates you could afford with them. This is not a throrough process and will definitely not gaurentee a rate for you come closing.
With a pre-approval, however, lenders will start the process of verifying your financial situation – with appropriate documentation from your employer, tax records, credit score, and so on. This gives a much more accurate idea of what rate you would be able to get with a lender.
A pre-approval is very beneficial during the home-buying process as it will allow you to have a much better idea of what range of homes you can afford. With a pre-approval, there will be no time wasted on finding a great home, only to find out after that you don’t meet the lender’s requirements to get a mortgage on that home.
Getting a pre-approval will also help you find out where you have any financial problems, if any, that may be hurting your credit score or debt levels. This gives you time to correct these problems before you go out and purchase a home so that you can get a better rate or afford a higher value home through a lender.
If you’re ready to start the pre-approval process, just click the button below to fill out our no-hassle, 90 Second Application form. After that a GTA Mortgage Pro will be in touch to guide you through the process and answer any questions you may have.