What’s the Difference Between a Pre-Qualification and a Pre-Approval?

Colorado Springs Real Estate Podcast with Patrick Collins

If you’re a homebuyer in our market, it’s better to get pre-approved than pre-qualified. Here’s why.

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What’s the difference between being pre-qualified and being pre-approved? Which one should you strive for as a homebuyer?

Being pre-qualified involves just getting on the phone and having a short conversation with a lender. They’ll take some basic information from you, and how they qualify you is based solely on the information you give them. However, this information, through no fault of your own, might not be accurate.

Being pre-approved means filling out a loan application, meeting with a lender in person, and giving your whole file to an underwriter. You’ll then get pre-approved by the underwriter. Once you’re pre-approved by that underwriter, you’re actually qualified to buy a home.

If you want to beat out other buyers, get pre-approved.

In this market, it’s especially important to be pre-approved. Sellers won’t want to take an offer from a buyer who is only pre-qualified—they’ll want a full pre-approval. If you want to beat out other buyers to the best deals in our market, get pre-approved.

If you have any questions about pre-approvals or pre-qualifications or you’re thinking about buying or selling a home in our market, don’t hesitate to reach out to me. I’d be happy to help you.