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Pre-Qualification vs Pre-Approval

One thing first-time homeowners try to figure out is what the first step should be when beginning the home buying and Oakville mortgage application process. Now many people are aware that buying a home is not a cheap process. In fact, this purchase will most likely be the biggest expense you ever make. This is why it is so important to be organized with your finances and with your monthly expenses.

But besides being organized with your income and spending, what other steps should be taken that can benefit homeowners? Well, this includes receiving a pre-qualified or a pre-approved letter from a mortgage professional. So, to help provide some clarity your local Oakville mortgage brokers with Loewen Group Mortgages have listed the key differences between these two processes.

 

Pre-Qualification Letter

A pre-qualification letter is a quick and easy process that can be done in person, online or sometimes even over the phone. In order to receive this letter, a mortgage professional will briefly review your financial record to determine what type of loan you could receive. They will not run a credit check on your finances, they will just see what types of loans you could qualify for.

 

Pre-Approval Letter

A pre-approval letter is way more involved than a pre-qualification letter. Here an Oakville mortgage broker will take the time to extensively review your financial history. They will also be able to determine more accurately what type of mortgages best fit your financial goals and they will even run a current credit check.

There are also far more benefits associated with getting pre-approved over getting pre-qualified. These benefits include receiving more credibility when working with different sellers. Those selling their house want to be sure the person buying it is financially stable and can actually afford to make the purchase. If the sellers know you have been pre-approved, they will know that a mortgage professional has already reviewed your finances and said you are capable of becoming a homeowner. Therefore, they will be more willing to choose your offer over someone who has not been pre-approved.

Getting pre-approved is also beneficial if you wish to have more access to the real estate market and by working with a realtor. Most real estate agents refuse to work with buyers who have not been pre-approved, therefore, it will be in your best interest to go through the pre-approval process.

 

Contact Us

If you would like to receive more information on the differences between a pre-qualification and a pre-approval letter, or if you are interested in beginning your application for an Oakville mortgage, please contact the Loewen Group Mortgages team at 416-907-3173.

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