To preapprove you, a lender checks your credit and reviews documents such as pay stubs, tax returns and bank statements, then issues a letter with a loan amount. A prequalification is lighter: it usually relies on what you say, without documents.
Why it matters
Sellers and agents take an offer more seriously when a preapproval letter comes with it, and it tells you what price range to shop in. It is not a final approval: the home, the appraisal and underwriting still have to check out.
Where you meet it
Before you start touring homes. Our mortgage documents checklist lists what to gather.
Planning to buy?
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