Pre-Qualification vs Pre-Approval
May 6, 2021 | Posted by: Sherry Corbitt
As a buyer, you surely will hear these terms during your mortgage process. Knowing what these two different stages are and understanding what they mean is undoubtedly vital. It is also essential to decide which one you will choose, based on what is best suited for you.
What is Pre-Qualification?
This can be done early on in the mortgage, and it will determine how much money you will be able to qualify for. You can complete the pre-qualification process as long as you provide some financial documents. This can help them to assess what your income is and what they can realistically provide you with. The pre-qualification is a relatively simple step to make, as it can be done quickly and effortlessly.
What is Pre-Approval?
This other stage is pre-approval when you can get a more realistic view of what loan amount you can receive for your mortgage. This step is taken by those who are ready for those who are prepared for the buying process. The pre-approval stage will take longer than the pre-qualification stage since there are many more factors involved. The professionals involved in your mortgage will require a variety of documentation, more than a pre-qualification. This can include bank statements, pay stubs, debts, and more. As more factors are involved, the pre-approval can take up to a couple of weeks to be completed.
Which One Will be More Beneficial?
Each stage can be beneficial, depending on your circumstances. If you want a quick estimate with less paperwork, choosing a pre-qualification would be the right way to go. Yet, a pre-qualification is not sufficient enough on its own if you are planning on purchasing. To get a much more accurate estimate, choosing a pre-approval would be best. Although a pre-approval requires you to provide more paperwork and takes longer, it will ensure you get a mortgage that will work for you.
Understanding and knowing the pre-qualification and pre-approval stages can help you establish what mortgage amount you will need for your purchase. It will also ensure that you are choosing the best possible option for you and your family.
If you have any questions or concerns about mortgages or pre-qualification and pre-approval, please reach out to me!
Sherry Corbitt, Mortgage Broker
Sources
-Folger, Jean (2021). Pre-Qualified vs. Pre-Approved: What’s the Difference? Investopedia. Retrieved from
https://www.investopedia.com/articles/basics/07/prequalified-approved.asp
-Kapralos, Chrissy (2021). Pre-Approved vs. Pre-Qualified. Loans Canada. Retrieved from https://loanscanada.ca/mortgage/pre-approved-vs-pre-qualified/
