Pre-Qual vs Pre-Approval: Understanding the Difference

PRE-QUALIFICATION

Pre-qualification is the first step in your homebuying journey. It’s a quick and simple process that gives you an estimate of how much you might be able to borrow. By providing basic financial information, such as your income, debts, and assets, you’ll receive a pre-qualification letter stating your potential loan amount. Pre-qualification is a great way to start your search, giving you a general idea of your budget, but it’s important to remember that it’s not a guarantee of financing.

Key Points:

Credit Check Required: Pre-qualification involves a credit check.
Quick & Easy: Complete the process online or in person in just a few minutes.
Not a Commitment: It’s an estimate, not a promise of a loan.

PRE-APPROVAL

Pre-approval is a more in-depth process and a stronger indicator of your borrowing power. During pre-approval, you will provide our lenders with your credit history, income, assets, and other financial details to determine an estimate of the amount you qualify for. You’ll receive a pre-approval letter, which can give you a competitive edge when making an offer on a home, showing sellers that you’re a serious and qualified buyer.

Key Points:

Credit Check Required: Pre-approval involves a credit check.
Stronger Offer: With a pre-approval letter in hand, you’re seen as a serious buyer by realtors and sellers.
Valid for 6 Months: Your Bank First pre-approval is valid for 6 months, giving you plenty of time to find your dream home.
More Detailed: Provides a clear picture of your financial situation and how much you can borrow.
Not a Commitment: It’s an estimate, not a promise of a loan.

Which is right for you?

If you’re just starting to explore your options, pre-qualification is a great first step. If you’re ready to start house hunting and want to make confident offers, pre-approval is the way to go. Our team is here to guide you through each step, ensuring you find the right mortgage solution for your needs.