Prequalification is a lender's estimate of how much you could be eligible to borrow based on information you supply. Prequalification does not mean you will get the loan. Prequalifications are usually free.
Preapproval usually means that the lender is ready to make you a mortgage loan based on the information and documentation you provided at the time you requested a preapproval. The preapproval will say how long it is valid for and may contain some other conditions for you to get the loan. Your lender may not require that you pay any fees except the cost of a credit report at this time.
There's a major difference between the two. We are only 2 weeks into 2014 and already we are experiencing multiple bids on properties. Inventory is still VERY tight. Reports at our staff meeting today confirmed 3 bids from 3 different buyers on a particular listing. The discussion opened up about multiple offers, advising your seller best in this scenario and then the question, "Who has the best financing?". The answer, "It's hard to tell." A perfect example of where a PREAPPROVAL could have helped the best-prepared buyer. Buyers, if you're out there shopping and you plan on actually making an offer, get PREAPPROVED. Have that in your back pocket. It could be the tool that gets you the house you fall in love with.
We have a team of preferred lenders who have proven themselves to be trusted experts who care about their clients and provide excellent, timely service. View our list of preferred lenders on our home page. Contact all of them and find your perfect fit.