A mortgage pre-qualification is often confused with a mortgage pre-approval but both are important – consider it one step, with two parts – 1.a) and 1.b) of the process. A mortgage pre-qualification, step 1.a) includes questions about your income and debt to understand what you can afford. This can be done online, over the telephone or across the table. The lender will give you an approximate amount of what you can afford, but not a pre-approval yet.
It is important to confirm you’ve been pre-approved for a specified amount, step 1.b) of the home buying process. Once you have submitted all of your information such as income sources, total savings, total assets and total debts correctly and completely; the pre-approval amount you receive from the financial institution will be more accurate and will be held for 90-120 days while you search for the house of your dreams.
