Pre-Qualified VS Pre-Approved - Which is preferable?

Both are good, but one is BETTER than the other.....

What does a pre-qualified mortgage mean?

A mortgage pre-approval by a bank or mortgage broker simply means that you have a vague commitment from a specific mortgage lender for future funding.  This is a ballpark estimate only of how much you can borrow for a mortgage, it can be done over the phone or online by a form you fill out. It does not include credit history, as well as
the biggest problem is it it does not give you a commitment for terms. IE: your rate or amount they will lend. Generally pre-qualification is a non commitment by your lender.

What does a pre-approved mortgage mean?

Basically pre-approval is a preliminary evaluation of a borrower by a lender that can be either a bank or a mortgage broker. This will determine whether they can be given a pre-qualification commitment in writing. Pre-approvals are generated with credit checks which facilitate pre-approval analysis. Pre-approval can provide a potential borrower with a written interest rate and a maximum amount they will lend. 

Why are Mortgage Pre-Approvals So Important?

Pre-Approvals: Lock in your rate for 90 to 120 days. So if the rate goes up, you are guaranteed what they committed to on paper. Or if the rate goes down they will match it the current rate. Either way you win.

Multiple offers: Pre-Approval letters give you more clout for your offer to be accepted especially in a multiple offer situation! Your Agent can either communicate this verbally to the seller or show them the written agreement with your permission. This gives you a competitive edge over others who don't have one prepared and in hand,  thereby increasing your odds of your offer being choosen as the winner. 

MOST IMPORTANTLY - Realtors and Sellers alike LOVE them! ....It's a WIN-WIN!...and you'll be happy too!

Copywrite Donna Fuller