When you hear pre-qualification and pre-approval, you may think the terms are interchangeable, but they have different meanings when it comes to the home buying process. Here’s what you need to know to make these early steps of home financing easier to understand.
What’s a pre-qualification?
A pre-qualification is a best guess of what you can possibly afford. Because it’s often based off what you verbally tell your lender about your income, it may not always be reliable.