Mortgage Pre-Approval vs. Pre-Qualified

Pre-Qualified vs Pre-Approved

Aren’t these both kinda the same thing?

Not quite. Each of these is a good start to your mortgage process (that ends with a full approval to buy a house). But one is more serious than the other if you get close to buying a home. Let us explain the difference between Mortgage Pre-Approval vs. Pre-Qualified.

Pre-qualify to get set:

“I think I want to buy a house, so how much can I afford?”

A pre-qualify is a great start BEFORE you go house-hunting. It gives you:

  • The opportunity to connect with your expert TNM broker to learn how mortgages work and what financial details you’ll need to have in place
  • A ballpark idea of what house price and in what neighbourhood you could buy
  • Which lender and mortgage products may be best for your situation
  • A sense of the rate-type and term that may work for your budget (e.g. how can I lower my mortgage payments?)
  • The ability to review or adjust your current finances, including getting your down payment together, or improving your credit score

Pre-approve to get serious:

“I want to start house-hunting now, how can I hold my great rate?

A pre-approval is an essential step for WHEN you start house-hunting. You’ll get:

  • A more accurate idea of the size of mortgage you can afford (you’ll provide more financial information than for a pre-qualify)
  • The lender and mortgage type that is best for your situation
  • The ability to hold your best rate for up to 120 days (a credit check is done by the lender to ensure your standing)
  • The financial pieces in place to be taken seriously by realtors and sellers
  • A quicker and easier close on your mortgage application, as you’ve already been pre-checked by a lender

One Major Point to consider:

When you are filling out the information to acquire your pre-approval you must be extremely careful to include all relevant information. If you leave out any info like past financial difficulties, alter your income, leave out any regular payments or other important info you can put your financing in jeopardy. I cannot stress this any more urgently. When your mortgage company verifies your records and finds irregularities they can deny your file even with a pre-approval. This happens regularly.

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