What is the difference between a pre-approval and a pre-qualification?

Pre-approval:

A pre approval is a written commitment issued by a Mortgage Company to a buyer after the buyer was going through a creditworthiness analysis. This included the verification of income, recourses, and verification of other information that is usually needed through this process. During this process you have to be able to verify at least 2 years worth of income and residential  history. This is done ahead of the time and is very typical of a normal credit evaluation program.

The only condition remaining will be:

A.; Finding a property that will fit the buyers needs and income level

B.: That the buyer does not buy or open additional line of credit during that time in their name.

C.; Limitations like that the home has to pass a home inspection, acceptable title insurance, clear termite and pest inspection and appraisal.

Pre-Qualification

This is just a quick estimation on whether the buyer could qualify for a loan under the lenders program's, and standards. You just made a quick phone call to a lender and you gave them basic information over the phone without having to verify anything.

The qualification is still pending on you

A.: That you can verify your income

B.: Possible credit check

C.; employment verification

Which of the two is better?

A Pre-approval is the on you would like to have right from the start when looking for a home. You had to turn in 2 years worth of income verifications like tax returns or bank statements.

After you all done with a Pre-Approval you will know exactly what you can afford and it will take the guess work out of if you can or can not buy a certain home due to the pricing.

You will also know very close in what amount of cash you have to bring to the closing table to buy the home of your dreams. to the closing table.