Pre-approval vs pre-qualified mortgage?

Answer

Although these terms sound interchangeable, they aren’t. A pre-approval is a much more thorough process, as the lender has already verified the applicant’s credit, assets and income.

Pre-qualified

Pre-qualified comes from initial information given to the lender by the buyer, but it has not been verified. Even if you’re pre-qualified, you must still be pre-approved.

Pre-approval

Getting pre-approved can also tell you your estimated monthly mortgage payments. Once you’re pre-approved, the process for obtaining a mortgage is much faster and you’re less likely to miss out on your dream home.

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Non-believers

Although, there are some people who believe that you need to think twice before getting pre-approved. See Forbes article Why Getting Pre-Approved For A Mortgage Is A Sham.

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