Pre-approval is the first step in purchasing any property. Once you are pre-approved then you will know exactly what price range you will be “shopping” in. Below is a brief explanation between a pre-qualification and a pre-approval. When presenting an offer, especially if it is a multiple offer situation, you want to be fully pre-approved and provide a pre-approval letter from the lender along with the purchase and sale to the Listing Agent.
Pre-qualification vs. pre-approval
Pre-qualification can usually occur after a 15 minute conversation with a lender. The lender will be able to give you a dollar amount that you qualify for based on the verbal information that you give them.
Pre-approval occurs once the lender has run a credit report on you, (and most likely) verified your income, bank statements, etc.