Pre-Qualified vs. Pre-Approved: What's the Difference?

By Fran Campbell - June 14, 2018

We have all heard the terms "Pre-Qualified" and "Pre-Approved", but what do they really mean? Is there a difference between the two? Yes ... and we think you should understand the difference before buying a Lake of the Ozark Home! So let's take a look at the differences...

What it Means to be Pre-Qualified
This gives you an idea of how much you might qualify to borrow. This process usually requires that you provide information to your mortgage lender but the information has yet to be verified. You have not actually applied for the loan yet, the information has not been verified, your credit history has not been reviewed and the loan is NOT guaranteed. A pre-qualification letter merely states that you MIGHT be approved for the mortgage amount.

What it Means to be Pre-Approved
When you are "pre-approved" for a loan, your mortgage lender has received, checked and verified your income, as well as assets and liabilities information. A copy of your credit report has likely been reviewed to check your credit history and habits. When you receive a pre-approval letter, it means that you are very likely to be approved for a mortgage and also states the amount for which you may be approved. While it isn't a 100% guarantee of your loan approval, a pre-approval carries more weight than the pre-qualification letter due to the more detailed efforts to prove your loan qualifications.

Neither is a Guarantee

With that being said, regardless of which letter you received, neither are an absolute guarantee that you will get the mortgage. There are many factors that can come into play during the process. Some lenders may provide a letter without actually verifying information. It's possible that you might be unaware of items on your credit report. Some information on your credit report may also be inaccurate.

To make the process as seamless as possible, be sure you work with a trusted mortgage lender that will take time explain your options thoroughly and answer any questions you may have. Good mortgage lenders take the time to verify information prior to pre-approval and they work with you to help clean up any issues or inaccuracies on your credit report which may serve as obstacles to getting final approval for the mortgage.

Your Trusted Real Estate Experts
The Fran Campbell Team will work with you to find a Lake of the Ozark Home that fits your lifestyle and budget. We can also refer you to several local mortgage lenders that will serve you well through the process. Our dynamic team of real estate experts is committed to excellence and helping our clients with all of their real estate needs!

Contact the Fran Campbell Team for your real estate needs!