Pre-Approval Vs Qualification

Pre-Approval Vs Qualification

What is a Qualification?

Qualifying for a mortgage requires no formal application or credit referencing.  Basically you provide your income, your monthly expenses, answer a couple questions and we use a formula to provide you an approximate maximum mortgage amount.

This takes into account heating bills, property taxes, and condo fees if applicable.

What is a Pre-Approval?

A pre-approval requires an actual application be completed including pulling a credit bureau and submission to a lender. This will give lenders a close estimate of your income and monthly expenses, as well as your credit capabilities and allow them to tentatively approve you for a mortgage amount and lock in an interest rate.  If rates go down, you get whichever is lower at the time of purchase!

What should you do?

The pre-approval requires a credit pull and is usually valid for 90-120 days.  If your serious about purchasing and are working with a quality realtor, you should definitely get a pre-approval started.

If you are just starting to consider purchasing a home, and want to know your potential budget, a qualification is the best option for you.

Best of luck in your home search!

Cameron