Why do you need a pre-approval as opposed to a pre-verification? Hi, I'm Brendan Moran with Five Star Real Estate. We have worked with hundreds of buyers over the years, so we know the difference and the difference can end up costing you thousands of dollars.

The Difference

A pre-qualification is not a pre-approval. A pre-approval is when you've actually spoken with a lender, you've given them their tax returns, and some pay stubs, and they have come up with a number that says, okay, we can approve you for this amount of money for a loan based on the interest rate and your credit score and all that stuff.

A pre-qualification is essentially where you go online somewhere and you type in how much you make and how much you owe, and it spits back out a number. And guess what? It's worthless. You want to go through the entire process of getting pre-approved, and in fact, you kind of have to.

It's a little tedious and sometimes it takes a couple of hours. But if you're serious about buying a home, it's just a necessary step. You're going to send all your documentation to the lender and they're going to tell you what you can afford. And the most important part, you really can't buy a house without it because the seller is going to look at your prequalification and they're going to say, what is this? This doesn't mean anything.

Call us before you get started and we can put you on the right path. And remember, it's free to work with a good buyer's agent because the seller pays the broker commissions. So give us a call before you get started.