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- Process: Pre-qualified is a quick, informal assessment, whereas pre-approval involves a detailed and thorough review.
- Outcome: Pre-qualified provides a rough estimate of borrowing power, while pre-approval specifies the exact loan amount.
- Implications: Pre-approval is a stronger signal to sellers of your seriousness, potentially speeding up the closing process.
Which One is Right for You?
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- Early Stage: Start with prequalification to get a sense of your budget and begin discussions with lenders.
- Ready to Buy: Once you’re ready to make an offer, move on to pre-approval to enhance your appeal as a buyer.
Understanding these differences can streamline your home buying process. Begin with pre-qualification to gauge your budget, and use pre-approval when you’re ready to make your move.