1. Have I been pre-approved or pre-qualified for a mortgage?
Understanding the difference between mortgage pre-qualification and mortgage pre-approval is essential. A mortgage pre-qualification is when you provide a lender or broker with financial information such as assets, income and debt. A pre-qualification provides a simple estimate of the amount of mortgage you may qualify for, and does not take in to account credit card ratings.
Pre-approved mortgages are tentative agreements supplied by lenders that mean you will qualify for a loan provided certain parameters are met. Your pre-approval will summarize the terms of the mortgage for which you have qualified and outline in detail the costs you can expect. Real estate professionals generally require a pre-approval before they will begin hunting for your home to ensure they show you appropriately priced options. A pre-approval gives you a head start in the home-buying process.
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