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Pre-Qualified vs. Pre-Approved

Getting pre-qualified and pre-approved are the very first steps of the home buying process. Without this step, you can’t get a mortgage, meaning can’t buy a home. Unless you’re a cash buyer. Nonetheless, most people will have to go through this process before home shopping. If you’re unsure of how much you’re likely to afford, try using a mortgage prequalification calculator first.

Here’s a homebuyer tip from Bank of America: “Expect surprises! Lenders look at every detail of your finances when granting preapproval. You might be asked about a car loan payment you made with a credit card, for example. Be prepared to answer lender questions as soon as they come up.”

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