Differences between Pre-qualification, Pre-approval and Approval

Pre-qualification Prequalification simply gives you an idea of the price range you can afford based on your stated income, assets, and liabilities. With a prequalification, your information is not verified and the loan is not guaranteed. When you are ready to seriously look for homes and make offers it is a good idea to get pre-qualified to avoid bidding on a home that is outside of your price range. Pre-approval During the pre-approval process your financial information is actually verified. With your permission, we will obtain your credit report to verify that the information you provided is correct. The credit report will also provide your credit score, which will help to determine if you can fit into a loan program. If your financial information is acceptable we will provide you with a pre-approval. If your financial information is such that you cannot qualify for a loan at this time we will discuss ways for you to improve your financial situation so you can qualify for a loan in the future. Approval Final approval is when you have applied for a loan and the lender approves the loan based on verification of your financial information.