Prequalification provides you with an estimate of how much you can expect to borrow to finance your home. nesto – as your lender – will conduct a preliminary assessment of your financial situation to determine how much they’re comfortable loaning you. Your prequalification can be granted fairly quickly, there is generally no cost to you, it doesn’t affect your credit score and can be helpful when it comes time to make an offer. It also provides you with confidence that you’re searching for an affordable home.

- Being prequalified is only a general indication that you could be approved for a mortgage if you were to apply – it’s not a guarantee of financing or loan approval. Additional information and documentation must meet your lender’s criteria to assess your ability to repay the mortgage so it’s best to avoid making any definitive decisions based on your prequalification status. It’s much better to wait until you get preapproved.

Important: Being prequalified is only a general indication that you could be approved for a mortgage if you were to apply – it’s not a guarantee of financing or loan approval.

Pre-approval means the bank or lender has actually approved you for a mortgage based on a detailed examination of your finances. It is a conditional commitment, in writing, for a specific loan amount. Pre-qualification, however, is simply a first step that shows what kind of loans you could be approved for, based on a few ballpark details. They’re both important steps in the process, but pre-approval is more concrete. It shows that lenders have already scrutinized several data points about your financial health, and decided you would be suitable for a loan.

A mortgage lender is an entity like a bank, financial institution, or private lender, who will underwrite and lend you money directly A mortgage broker is a middle person who deals with multiple lenders, trying to find you a suitable deal. Mortgage brokers generally don’t charge a fee, since they receive a healthy commission from the lender.