What is the difference between being pre-qualified and pre-approved for a mortgage?

Usually a buyer will be pre-qualified first and then get pre-approved.  What is the difference?  Pre-qualification is an informal determination by a lender or mortgage broker stating how much mortgage you can afford.  Pre-approval is a guarantee in writing by a lender or mortgage broker granting you a loan up to a specified amount.  Sellers will find offers from a pre-approved buyer more attractive, and the length of time before closing can be shorter if you’ve completed the steps to secure mortgage approval prior to signing a contract on a property.

 

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