Prequalified vs. Preapproved – what’s the difference?

Prequalification vs. Preapproval: These terms are often used interchangeably — but there are big differences between the two.

With a prequalification, the lender is performing a few checks on the prospective borrower’s finances to determine the home loan amount they may qualify for. A prequalification letter tells you how much the client will probably be able to borrow from the lender, if further examination supports the preliminary findings.

For a preapproval, however, the mortgage lender examines and verifies the client’s debt, income, savings, assets and credit report. The information must satisfy the lender’s underwriters that this client is a low risk and a good prospect for repaying the loan. Preapproval is more vigorous vetting and a lengthier process than prequalification; buyers who submit to the process and are approved are serious buyers. 

As a preapproved home buyer you will know which homes you can actually afford and what your loan options are.

As a home seller you will want to make sure to only accept offers from a buyer who is preapproved vs. just prequalified for a loan.

At the Brooks & Heinze Team, we are happy to work with any lender you choose, however, if you need a referral to one of our trusted lenders we can put you in touch with an exceptional mortgage broker. Finding a good lender can be confusing. There is a ton of information on the web but sifting through it all and understanding it can be overwhelming. Let us help you.

Kerstin G. Brooks – 206.276.5827
Brooks & Heinze Real Estate Team in Seattle
Skyline Properties, Inc.
www.propertyinseattle.com