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September 26, 2015 3:12 pm
Yes, there's a difference between a loan Pre-Qualification letter and a Pre-Approval.
In a nutshell, home buyers can ask their loan officer or lender for a Pre-Qualification letter over the phone without showing proof of income. Hence, a Pre-Qualification letter is just a piece of paper with very little value.
However, it still serves a good purpose: it gives the prospecting home buyer a ballpark of his/her buying power so he/she is home shopping in the right price range.
A Pre-Approval letter on the other hand, requires proof of income. Your loan officer or lender will want to see your income as well as your debt before he'll give you a Pre-Approval letter.
When making an offer to buy a home, the seller and listing agent will want to see your Pre-Approval letter. Having one of these attached to your offer shows how serious and well-prepared you are in your endeavors to buy a home.