When it comes to financing a home in Boston, it's important to understand the difference between a mortgage pre-qualification and pre-approval.

A mortgage pre-qualification is an initial assessment done by a lender to determine how much you may be eligible to borrow. It is based on the information you provide regarding your income, assets, and debts. Pre-qualification gives you a rough estimate of the loan amount you could potentially qualify for, but it is not a guarantee of approval.

On the other hand, a mortgage pre-approval is a more thorough evaluation of your financial situation. It involves submitting a complete mortgage application along with supporting documents such as pay stubs, bank statements, and tax returns. The lender reviews this information, verifies your creditworthiness, and assesses your ability to repay the loan. If you meet the lender's criteria, you receive a pre-approval letter stating the loan amount you are approved for.

Here's an example to illustrate the difference:

Let's say you are interested in buying a home in Boston and have estimated your budget to be around $500,000. You decide to get pre-qualified with a lender. Based on the information you provide, the lender determines that you could potentially qualify for a loan of up to $400,000.

Later, you decide to proceed with a mortgage pre-approval. You submit a complete application and provide all the necessary documents. The lender reviews your application, assesses your creditworthiness, and determines that you are eligible for a loan of $450,000.

As you can see, the pre-approval process provides a more accurate estimate of the loan amount you can borrow, based on a thorough evaluation of your financial situation.

It's important to note that both pre-qualification and pre-approval are not guarantees of final loan approval. The actual loan amount, interest rate, and terms will be determined during the underwriting process, which occurs after you have identified a property and entered into a purchase agreement.

For more information on mortgage pre-qualification and pre-approval, you can refer to reputable sources such as:

• Consumer Financial Protection Bureau
• Bankrate
• NerdWallet

Remember, it's always a good idea to consult with a mortgage professional to understand the specific requirements and processes involved in obtaining a mortgage for Boston homes.