Pre-qualified vs. Pre-approved-What is the difference?

Pre-approval letters and pre-qualification letters are important documents for a homebuyer. A pre-approval letter is a written commitment from a lender that states the amount of money you are approved to borrow. On the other hand, a pre-qualification letter is an estimate of how much money you may be able to borrow from a lender.

The difference between these two types of letters lies in their purpose and content. A pre-approval letter provides more detailed information on the loan amount, interest rate, and terms than a pre-qualification letter does. It also demonstrates to sellers that you are serious about buying their property and that you have the financial means to do so.

Both types of letters can help buyers in the homebuying process, but it’s important to understand the differences between them in order to make an informed decision. A pre-approval letter is a stronger letter to submit with an offer.