What is the difference between a pre-qualification letter and/or analysis and a pre-approval?
A pre-qualification letter is typically the result of information shared between a mortgage broker and mortgage borrower and usually does not incorporate information obtained from a credit report. The end product for a pre-qualification analysis will be an estimate of the maximum mortgage amount for which you may qualify. Typically, there is no cost or commitment for a pre-qualification letter. A pre-approval letter is provided by the lender and may be upheld and/or validated as buyer credit worthy in the eyes of a seller or Real Estate agent for purposes of a home purchase. Having a pre-approval letter from a lender at the time of an offer on a home you wish to purchase can make the difference in the Seller selling to you and/or another buyer who doesn’t have a pre-approval letter in hand. This can be an effective tool when making a purchase of a home and can add to your negotiating strength.
