Before you start shopping for your dream home, it’s important to know exactly what you can borrow.
A pre-qualification is a great first step, giving you an initial estimate of how much you might be able to borrow based on your income, credit, and other financial details.
However, when you’re ready to hit the ground running and start looking at homes, a pre-approval takes things a step further. It gives you a more accurate picture of your borrowing power by reviewing your finances in detail, including things like credit history and debt ratios.
Pre-Qualification
- Rough max purchase price based on verbal numbers
- Used to get a rough idea of where you stand
- Doesn’t require your credit to be pulled
Pre-Approval
- Max purchase price based on documentation provided
- Used to go look for homes & speed up approval process
- Credit must be pulled
With a pre-approval in hand, you’ll have a clear understanding of your budget, which gives you the confidence to make an offer on a home you love—without the guesswork. This step ensures you’re not wasting time on properties that are out of your price range, and it can also help you stand out to sellers as a serious buyer.