Pre-qualification is an informal way to determine how much you may be able to borrow. You can be pre-qualified over the phone with no paperwork by telling us your income, your long-term debts and how large of a downpayment you can afford. Without any obligation, this helps you arrive at a ballpark figure of the amount you may have available to spend on a house.
Pre-approval is an actual commitment to lend to you. It involves assembling several financial records and going through a preliminary approval process. Pre-approval gives you a definite idea of what you can afford and shows sellers that you are serious about buying.
Posted in: The Home Buying Process