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

By Bob Millaway, South Jersey Community Expert & REALTOR®

Pre-qualification is an informal estimate of what you can afford based on self-reported financial information. Pre-approval is a verified commitment from a lender after reviewing your credit, income, and assets. Sellers in South Jersey require a pre-approval letter, not just pre-qualification, before considering an offer. Pre-approval also helps you shop with confidence knowing your exact budget.

Why It Matters

Pre-approval carries real weight with sellers and agents. Getting pre-approved before house hunting puts you in a stronger position to make a competitive offer.

Related Questions

What should I look for during an open house? How much should I save for a down payment? What are closing costs and how much are they? What loan options are available for first-time buyers? What questions should I ask my real estate agent when buying?

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