What is a mortgage prequalification?

A mortgage prequalification is a quick estimate of how much home you can likely afford. Why is it a quick estimate? Because, honestly, you don’t need to do much to get one. All you need is your name, phone number, and some numbers that show your income, assets and debts. Give these to your lender over the phone, online or in person—and they’ll give you a prequalification on the spot.When is the best time to get a mortgage prequalification? First, decide if you’re ready to buy a home. If you are, get prequalified. Yeah, it’s really that simple. Since a prequalification gives you a big picture idea of how much mortgage you would be approved for, the best time to get one is in the very beginning—when you’re reviewing your budget. Think of it as the first step in the mortgage process.

What is a mortgage preapproval?

A mortgage preapproval is a step above a prequalification. It’s a thorough investigation of your income, assets, credit history, rental history and debts. It will give you a concrete idea of how much home you can afford—according to your lender. When you get preapproved, a lender verifies you’re employed, checks that you aren’t falsifying the facts, and makes sure you aren’t swimming in debt up to your eyeballs.

When is the best time to get a mortgage preapproval?

The same as with mortgage prequalification, the best time to get a mortgage preapproval is when you’re ready to start shopping for a house. In fact, we’re going to let you in on a little secret—you can skip prequalification and go straight for preapproval.