Home loan documents and the home loan process can be slightly different for pre-qualified and pre-approved home loans.
Usually, the pre-qualification process precedes the pre-approval of the home loan.
The pre-qualification process is usually when the applicant offers the lender a comprehensive account of their credit statement and financial history, income, company details, etc.
Pre-approval is the step where the lender verifies the details and documents required for a home loan that is provided by the applicant. They also do a thorough credit check and verification of the lender’s financial background.
Pre-qualification is quite an elementary process as it is mostly verbal, on the other hand, the pre-approval process requires a comprehensive set of financial documents like income tax returns, balance sheets, etc.
A pre-qualification letter does not cost the applicant anything, however, a pre-approved letter may cost the applicant an amount after the loan closure.
A pre-qualified letter need not specify the interest rate on the home loan, however, the pre-approved letter will specify the rate of interest that can be locked in a specific rate
The pre-qualification process can take up to 30-45 days, however, the pre-approved phase can take around 4-5 days for the loan to close.