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There’s a world of difference between being pre-qualified for a loan and being pre-approved. Pre-approval means you’ve got skin in the game. It means you’re a boss. And it's proof that you can buy.
Besides being the grown-up thing to do, pre-approval puts you in a better position when you make an offer. Everyone takes you more seriously. Pre-approval also provides evidence to your real estate professional and the seller (or seller’s agent) that a trusted financial institution is willing to finance the purchase.
In most housing markets, sellers are going to expect you to be pre-approved when you make your offer. And when you’re pre-approved, you’re more likely to have your offer accepted — or at least, you won’t lose out on a bid because you have to go back to the bank to get approved for a loan.
As for pre-qualification, it’s an approximation and not necessary unless you have no clue about your creditworthiness and just want a snapshot.
By contrast, with a pre-approval, a lender typically goes deeper and tells you more specifically how big a loan you can get. Caution here: Just because the lender says you can take out a loan for an amount, doesn't mean you should! Consider your lifestyle and monthly budget to decide on the responsible loan amount for you.
To get pre-approved, you must also authorize a lender to pull your credit.