Pre-Qualification
A pre-qualification is the process in which the mortgage loan originator reviews the income, debt, assets, credit history and confirmed monies available for down payment and closing costs. From this information, the mortgage representative is able to confirm the amount and type of loan available to the borrower. The borrower receives a pre-qualification, which provides you with an understanding of your lending capabilities.

Pre-Approval
When purchasing a home, it can be advantageous to get pre-approved for a mortgage.

A pre-approval takes the prequalification process one-step further. A loan application must be completed, which is required in order to be pre-qualified. The mortgage lender will review the following information: income, debt, assets, confirmed monies available for down payment and closing costs. A credit report will be run and the lender will then issue a loan approval letter to the borrower based on their review of the information.

The 'pre-approval letter' can be provided to a Realtor and/or Seller. Typically, Realtors/Sellers prefer to work with people they know are able to obtain sufficient loan funds to purchase the property.