I thought getting pre-qualified for a mortgage would be simple, but it was a huge pain until I found Credit Karma

• I thought getting pre-qualified for a mortgage would be simple. But, finding a lender that would give me a number without adding a hard inquiry to my credit report was complicated.
• Many banks tend to use the terms "pre-qualify" and "pre-approve" interchangeably, even though they're different things. I found some pre-qualification applications were more like a pre-approval, and asked permission to run a hard credit inquiry at the end.
• Finally, I found that Credit Karma was able to give me a clear pre-qualification easily, for free, without putting a hard inquiry on my credit report.
• Read more personal finance coverage.

I've been saving for a down payment on a home and for a while now. I'm still months, or even a year, away from buying, but I'm starting to get serious about budgeting more, saving more, and making this dream a reality.

Since I won't be able to buy in my current city, Seattle, I've set my sights on my hometown of Cincinnati, Ohio. I'm visiting this December, and starting to get serious about the process. A week before my trip to Ohio, I realized that I should have a number in mind to start budgeting more precisely, zeroing in how much I need for a down payment, and start visiting neighborhoods I'd like to live in while I'm in town.

I wanted to get a number, but I didn't want any new credit inquiries showing up on my credit report. By definition, getting pre-qualified for a mortgage would be ideal - pre-qualification checks your ability to buy based on the information you give, without a hard credit inquiry that could temporarily ding my score. But, I found out quickly while slogging through lenders and so-called pre-qualification applications that these terms are often applied rather generally.

Pre-qualification and pre-approval are used interchangeably, but they shouldn't be

These two terms are truly different, according to Andy Taylor, general manager of mortgages at Credit Karma. "The primary difference is the level of validation, and the amount of information that's provided by the person who's trying to get the loan," he tells me.

While a pre-qualification is based on the information you provided and not vetted by the lender, a pre-approval verifies your income, credit, and debt information. While a pre-approval includes a hard inquiry that appears on your credit report, a pre-qualification shouldn't.

As I started my search for pre-qualification, I found that many banks and lenders use the terms interchangeably. I started a "pre-qualification" application with a major bank, only to find that it was more like a pre-approval when it asked to run a credit check at the end. Even home listing sites use the terms interchangeably.

I came across Credit Karma's tool, and found exactly what I was looking for

I was surprised it took me so long to find a simple pre-qualification. Finally, I came across Credit Karma's tool, and I got exactly what I was looking for: a clear-cut number on how much I could borrow.

Taylor says that this works because Credit Karma already has some of that information, and can use that in the pre-qualification calculations. "Because we have the credit scores, and we've got verified income data, and maybe you've even done your taxes with us, we can begin to paint that whole picture," says Taylor. I'd done my taxes with Credit Karma previously, and checked my credit there as well. Because of this, I had a pre-qualification letter in hand with just a few clicks.

I found exactly what I needed through Credit Karma's tool. I got a number that's helped me better adjust my budget and my dreams, and confidence that when the time comes to take the next step, I'll be in good shape.

Get pre-qualified for a mortgage for free with Credit Karma »

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