What is the difference between pre-qualification and pre-approval? When do I actually know I got an approval to remove financing conditions on a property?
Pre-qualification calculates the amount you can qualify for based on your income and total debts. It does not take into consideration your down payment, source/quality of income and credit history. Pre-approval is more significant than a pre-qualification, although it is not without its own shortcomings. Getting pre-approved “normally” means the lender approved you after reviewing and accepting your credit score, written income verification and proof of down payment availability. Having a pre-approval allows you to buy more confidently knowing not only what home price you can afford, but also that your rate is protected for a specified period of time in case interest rates go up. It also allows you to get the lower rate if rates go down. Moreover, it sometimes helps negotiate a better price with the sellers because it shows the buyer to be “strong” and serious enough with their offer for having a pre-approved mortgage. If you get an approval subject to satisfactory credit history, inco
