Getting pre-approved and getting pre-qualified for a mortgage are different, though some lenders use the terms interchangeably.
Pre-qualification is based solely on information you submit — lenders don’t look at your background on their own — and is ideal in the early stages of the homebuying process for finding out how much you could borrow.
For a pre-approval, lenders verify your information and make a hard inquiry into your credit. The resulting quote then acts as an offer from a lender.
Both can help you get started with your home buying planning and search, but are useful at different points. Pre-qualification often doesn’t involve a hard credit inquiry, which means it won’t ding your credit score.
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I want to own a home, hopefully within the next year or two. It would be my first home, and even though I’m saving for it aggressively, I realized a few weeks ago that I needed to start zeroing in on how much I have left to save for a down payment, and how large of a mortgage I could be approved for when I’m ready.
I needed a number to base my planning and saving on, even if it was just a loose figure. Getting pre-qualified for a mortgage helped me find out the loan amount I could be approved for, what my potential home-buying budget will be, and how much I still need to save for a down payment, without dinging my credit.See the rest of the story at Business Insider
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