Should I get pre-approved or just pre-qualified?

Get pre-approved for your mortgage loan, rather than just pre-qualified.

With pre-approval, the Mortgage Broker pulls a credit report, verifies a borrower’s income and takes other preliminary underwriting steps to come up with a maximum allowable loan amount, which usually doesn’t change. The Mortgage Broker and the Lender also commit, in writing, to making that loan if a purchase occurs within a set amount of time. In a pre-qualification, the customer provides the information, but the Mortgage Broker doesn’t check it and there’s no assurance that the loan will be approved. Pre-approval requires the home-shopper to fill out a loan application and provide supporting T4s or pay stubs, bank statements, employment information and tax returns. Pre-approval puts you in the strongest possible bargaining position with sellers and their real estate agents. Those who are in a hurry to move a property often will accept a lower bid from a pre-approved buyer because they can be certain the deal will go through.