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Pre-Qualification vs. Pre-Approval: What’s the difference?

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Looking at homes without knowing how much you can afford can be a waste of time for you and your realtor.

“Give me six hours to chop down a tree and I will spend the first four sharpening the axe.”


The same wise sentiment can apply to purchasing a home – why start house hunting without putting in the time to get pre-approved so you can know your budget?

Armed with misconceptions, many home buyers mistakenly think that pre-qualification and pre-approval for a mortgage are the same thing. In reality, there is a big difference between these two terms. Understanding the distinction could be the difference between having your offer on a house accepted or rejected.


During a pre-qualification, you provide your lender with your overall financial picture (including your income, asset, and debt information). After evaluating this information, your loan officer can give you a good estimate of what you qualify for. A pre-qualification does not include verifying the information you provide, nor an analysis of your credit report. Because of this, a pre-qualified buyer does not carry the same weight as a pre-approved buyer when making an offer on home.


Pre-Approval is when you complete an official loan application and provide your loan officer with the necessary information to document and verify your income, assets, and debts. Your lender will pull your credit report and look over documents such as bank statements and W-2s. From this analysis, the loan officer can tell you the specific amount for which you are approved, and which loan programs might be the best fit for your unique financial situation.


Pre-Qualification Pre-Approval
Based on Estimates
Based on documented information  
Income, Assets, and Verified Credit  
Written conditional commitment  
Shows serious intentions to buy  
Gives strongest negotiating power  

Bottom Line?

A pre-approval carries a stronger weight with sellers and puts you in the best negotiating position possible.

Want to get pre-approved before looking at homes? Start by Contacting Me, or Apply Now.

Want to get pre-approved before looking at homes? Find you loan officer to get started, or Apply Now.

Want to get pre-approved before looking at homes? Drop us a line, or Apply Now with our branch manager or your loan originator.

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