If you’re buying a home, learn the key terms and understand the difference between “pre-approval” and “pre-qualification". While they sound similar, they have distinct meanings and implications. We break down the differences to help you make informed decisions on your home buying journey. 

Pre-Qualified: 

When you're pre-qualified for a mortgage, it means a lender has assessed your financial situation based on information you've provided. This usually includes your income, assets, debts, and credit score. Pre-qualification gives you a rough estimate of how much you might be able to borrow. It's a relatively quick and informal process, often done online or over the phone. 

However, being pre-qualified doesn't guarantee you a loan. The information provided hasn't been verified, so it's more of an initial assessment rather than a firm commitment from the lender. While pre-qualification gives a rough idea of your budget, pre-approval shows a more accurate borrowing picture. 

Pre-Approved: 

Pre-approval involves a more thorough examination of your finances by the lender. You must provide pay stubs, bank statements, and tax returns to verify your income, assets, and debts. The lender also checks your credit report. Based on this information, the lender will offer you a specific loan amount and interest rate, usually valid 60 to 90 days. 

Being pre-approved carries more weight than being pre-qualified because it shows sellers that you're a serious and capable buyer. A pre-approval shows a lender has reviewed your finances and agrees to lend a set amount of money. It can give you a competitive edge as sellers are more likely to take your offer seriously. 

Our dedicated team is here to keep the mortgage process quick and simple. Get started today by searching for an Ameris Mortgage Banker in your area. 
 

All loans subject to credit approval.

The opinions voiced in this material are for general information only and are not intended to provide specific advice or recommendations for any individual. 

Sources:  

https://fred.stlouisfed.org/series/MORTGAGE30US 

https://fred.stlouisfed.org/series/MSPUS 

https://www.investopedia.com/terms/p/preapproval.asp