Know the Difference Between Pre Qualification and Pre Approval

Did you know that pre qualification and pre approval do not mean the same thing when buying a home?

Something  buyers and sellers need to know when venturing into the housing market:

Pre Qualification

This means you have the credit score, and  pulled credit from your lender that shows him/her you "could" be approved for a loan to buy a house.
In this segment process, you are gathering all the necessary  items needed to get a preapproval and go into underwriting.
Underwriting is a fancy way of saying all investors involved in your prequalification process accept or reject the documentation from your lender.

Pre Approval

Is a simple way of saying to the seller, I am ready for underwriting now. I do not need to gather anymore paperwork, and I am ready to buy and be approved for a loan right now.

Many buyers get these two approvals  mixed up, thinking that they are pre qualified and ready to buy.

Buyers: best advise when  you are starting to look, if your lender says you're pre qualified, great you start looking, however continue to stay in contact with your lender getting all the necessary  paperwork together to submit to underwriting, that way your ready  when you do find a home to put an offer on, plus it will make your offer look stronger than the buyer who is just qualified.

Sellers: Always ask for a letter of approval whether a pre qualification or pre approval with any offer.
Just because a buyer gives you a pre qualification doesn't mean they can't buy your home, it just means the lender is still asking for more information from the buyer to go into underwriting.

Please ask your chosen lender if you have further questions on this process.