Which Loan Approval Letter is Right For YOU?
Is there a big difference between a Pre-Qualification letter and a Pre-Approval letter? As a matter of fact, there is.
Though many times the names of these letters are used interchangeably, they affect your buying power differently. A pre-qualification letter helps you determine how much home you can afford, as it is based on specific information you share with your lender; however, the lender does not verify this information, and that means there is no guarantee you will qualify for that loan amount. In order to get a Pre-Approval letter, your lender will verify that financial information provided, and therefore commit to lending a specified amount. That means, a Pre-Approval letter provides greater buying power and makes your offer even more attractive to sellers!