Pre-qualifications versus Pre-approvals

I had a question from a, Elgin home buyer on the difference on pre-approvals versus pre-qualifications.     I recommend contacting your preferred Fox Valley area mortgage lender for details, but I found a great article on this at Investopedia that I linked below.

Basically, a pre-qualification means you exist in the eyes of a  bank.  The pre-qual gives a general impression of you, based on the information you provide the bank, such as your debt, income and assets.  It is not a full report and can change upon full disclosure.

A pre-approval is everything under the sun on you, including job history, credit check, loan balances, late payments and more.  The bank will go through everything about your credit and financial situation, then it will tell you how much you are approved for a mortgage.  This is the point at which you can lock in an interest rate and have the bank commit to conditional loan amount.  A serious Elgin home buyer will get a pre-approval letter from their lender to show a Realtor before they go out to visit properties.

Read more here: http://www.investopedia.com/articles/basics/07/prequalified-approved.asp#axzz1nEmO94ga

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