I’m confused by some terminology. Can you please explain the difference between being pre-approved for a loan and prequalifying? I don’t get it. Thanks.
Just Show Me the Money
Dear Just Show Me,
The difference between the two is like having a bird in the hand or one in the bush. Prequalified means that you have the potential to be approved for a loan, as long as you didn’t cook your books or tell any little white lies while filling out your financial info. Those details will have to be confirmed before you know your final, approved amount.
Being preapproved, means that the bank has already gone shaking your closet for skeletons and has determined that you’re on the level. So, they’re basically guaranteeing a maximum amount for you to borrow, based on what their digging has surfaced. Now you know.