What is the difference between loan pre-qualification and pre-approval?
A pre-qualification occurs when a prospective buyer discloses, either verbally or by providing documentation of, their income, assets and credit so that a loan agent may determine the loan amount that a buyer could likely qualify for based on standard lending guidelines. A pre-approval involves an underwriter (the lender’s risk evaluator) actually reviewing a prospective buyer’s loan application with a formal credit determination occurring that is subject to an appraisal, title report and purchase contract, along with whatever supporting documentation the underwriter may request.
