Although the terms pre-qualification and pre-approval are often used interchangeably, the two differ greatly in the process involved in obtaining them and in the benefits they provide when buying a Virginia Beach home. Here’s what you need to know about each of them:

Pre-qualification:

This is a lender’s informal way of estimating how much you may be able to borrow. It is based on the information you provide (often by phone), none of which needs to be verified or documented. Since a letter of pre-qualification gives you an idea of how much house and the amount of mortgage payments you can afford, the best time to get pre-qualified is as soon as you decide you want to buy a Virginia Beach home.

You supply to the lender unverified information about your income, assets, debts, and possible amount of a down payment. There is no cost involved in obtaining pre-qualification, and there is no commitment for either party. Understand, however, that a letter of pre-qualification does not mean you will get a loan; it is simply a ballpark figure of the amount you can afford to spend on your Virginia Beach home and an indication that you might qualify for a mortgage in that amount.

Pre-Approval:

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