Pre-approvals and pre-qualification are both an analysis of your borrowing capacity concerning your income, credit, conditions, down payment, savings, and net worth minus the down payment and closing costs. They do not consider the collateral (or property) as they are assessed before finding a subject property. Pre-qualifications do not have a rate or discount attached to your qualification, such as in the case of a variable rate.
A rate hold will give you peace of mind while shopping for a property in the case of a pre-approval. Pre-approvals with rate holds will cost the lender to hold the money for you at a specific rate/discount. Some lenders that offer the best rates do not offer pre-approvals with rate holds; conversely, they offer pre-qualifications without rate holds to keep the cost to buy money down for live mortgages where clients have an accepted offer on a property.
Most lenders that offer a pre-approval with a rate hold will attach a premium to this rate, meaning that if you return to that lender, you will be locked into that higher rate even if rates stay down. Therefore, lenders with the best rates offer only live rates, which can only be locked in once you have an accepted offer on a specific property. Please speak to our commission-free nesto expert to find the most suitable solution for your financial situation.