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Mortgage Pre-Qualification vs Pre-Approval – What’s the Difference?

The difference between pre-qualification vs pre-approval is the verification process lenders use to determine how much you qualify for.
They may seem interchangeable, but they mean different things.
With a pre-qualification, lenders rely on self-reported information to offer you a quote. It doesn’t typically require them to verify your credit, employment, or financial documentation.
On the other hand, pre-approval involves verifications to approve you for a mortgage loan. Lenders review your credit, verify your employment, and look at financial documentation, like pay stubs, bank statements, and tax returns.
When you’re ready to make an offer on your house, a pre-approval tells the seller that you’re an approved buyer who can afford to buy their home, giving you an edge over non-approved and pre-qualified buyers.
To better understand the difference between pre-qualification and pre-approval, let’s take a closer look at what they involve, what information they require, and the timeframes associated with each.
Pre-Approval | Pre-Qualification | |
Verifies actual income | Yes | No |
Verifies employment | Yes | No |
Uses confirmed credit score | Yes | No |
Accepted by home sellers | Yes | No |
Accuracy level | 100% | 0% |
- → What is Mortgage Pre-Qualification?
- → What is Mortgage Pre-Approval?
- → What’s the Difference Between Pre-Approval vs Pre-Qualification?
- → What Do You Need to Get Pre-Approved?
- → How Long Does Pre-Qualification or Pre-Approval Take?
- → Why is Pre-Approval For a Mortgage So Important?
- → Is a Pre-Approval Letter the Same as Applying For a Loan?
- → When Is the Best Time to Get Pre-Approved?
- → Which Should I Choose – Pre-Qualification or Pre-Approval?
What is Mortgage Pre-Qualification?
Mortgage pre-qualification helps lenders understand how much you can borrow by asking you a few questions about your finances.
For example, they’ll ask about your income and whether or not you have a down payment saved up. Lenders may also ask for basic information about your credit score and monthly debts.
Once they review this information, lenders will offer you a quote without verifying the info you gave them, or looking further into your income, investments, and assets.
Because it’s based on estimated figures only, pre-qualification is generally quicker than pre-approval.
But keep in mind that your pre-qualification estimate isn’t factual. It’s just an idea of how much you can borrow. The actual number typically changes once the lender runs credit and verifies your financial documents.
You can use a pre-qualification as a guide to determine your price range, but not much more. These can be useful for buyers who aren’t serious about buying a home in the near future.
What is Mortgage Pre-Approval?
Mortgage pre-approval is a more robust indicator of your ability to secure a home loan. It goes a step beyond pre-qualification by looking at your credit, verifying your financial documents, and making you stand out among other home buyers when it’s time to make an offer.
With pre-approval, lenders pull a hard inquiry on your credit report and verify each source of income that you list on the loan application. These include your pay stubs, W-2 statements, and, in some cases, your 1099s and tax returns.
Tip: Hard credit inquiries will only lower your score by five points or less. Your score will also come back up after a few months as long as you maintain regular credit best practices.
Learn more about how getting pre-approved for a mortgage affects your credit score.
A pre-approval allows lenders to determine your debt-to-income ratio, which tells them exactly how much you can borrow. Along with that approval, you’ll get an itemized estimate of interest rates, closing costs, monthly payments, and the maximum amount you’re approved to buy.
By giving you a pre-approval, the lender is saying you’re a fully approved buyer. When you find a home, and it’s time to get your mortgage, the lender only needs to approve the property you’re buying before issuing your full mortgage approval.
One big advantage pre-approval has over pre-qualification is that it can be the difference between getting an approved offer on a home or losing it to another buyer.
Sellers and their agents know that pre-approvals mean more than pre-qualifications, and they’ll rarely look at an offer that doesn’t include a pre-approval letter.
What’s the Difference Between Pre-Approval vs Pre-Qualification?
Pre-approval is a more in-depth process where lenders verify your credit and financial information before giving you a detailed loan estimate. Pre-qualification relies on self-reported information without taking any additional verification steps.
Here’s a side-by-side comparison:
Pre-Qualification | Pre-Approval |
Does not require financial verification | Requires financial verification |
Self-reported information used but not verified | Credit check and supporting financial documentation required |
Can be useful in determining your home budget | Is more accurate for budgeting and is required to make a serious offer on a home |
As you can see, pre-qualification doesn’t consider any verified documentation, meaning it doesn’t get you any closer to getting a mortgage.
However, pre-approval means more to sellers, as it requires lenders to verify your financial information and approve you — the buyer — for a mortgage. Plus, it will pinpoint your home-buying budget.
The end goal is to get a full mortgage approval, not a full mortgage qualification. We always advise starting with a pre-approval because they are more accurate, give you more information, and are part of the mortgage process.
Pre-approvals mean more to sellers and allow you to fast-forward the mortgage process when you find a home you love.

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What Do You Need to Get Pre-Approved?
To get pre-approved, you’ll need to provide the lender with supporting financial documents. This differs from the pre-qualification process in that the lender will take a much closer look into your financial profile before offering you a mortgage loan.
Here’s a snapshot of what you need to get pre-approved versus pre-qualified:
Pre-Qualification Requirements | Pre-Approval Requirements |
No credit inquiry | “Hard” credit inquiry |
Self-reported income information | Verified income information |
No additional financial verification | Financial documentation required (i.e. W-2) |
Down payment amount | Down payment amount |
The above snapshot isn’t one-size-fits-all. Lenders may differ in what documents they require and what tools they use in the pre-approval process.
For example, some lenders may require a paper application and actual signatures, while others may offer a more streamlined approach with an online application and e-signatures.
How Long Does Pre-Qualification or Pre-Approval Take?
Pre-qualification can happen in minutes but can take up to a couple of days. Pre-approval can also happen quickly and can take longer depending on the lender, sometimes as long as seven to ten business days.
At Homebuyer, our process takes just three minutes.
Why is Pre-Approval For a Mortgage So Important?
A mortgage pre-approval is essential because it ensures that you are on the same page with your lender and are ready to do some serious house hunting. That’s why it’s important to get pre-approved for a mortgage before looking for your home.
Many buyers are pre-approved for more than they want to spend. The detailed loan estimate provided will show your interest rate, closing cost, and monthly payment information, which helps you dial in your personal budget and make a more confident offer on a home.
This transparency also makes it easier to determine how much you should bid or offer on a home for sale, and it allows you to make the best decision possible when putting in an offer.
When the time comes to submit your offer, a pre-approval letter will let the seller know you’re a serious, qualified buyer.
Is a Pre-Approval Letter the Same as Applying For a Loan?
No, pre-approval means that the lender has vetted your financial documents, verified your income, assets, and credit, and is confident that you would receive final approval for a loan.
While a pre-approval letter is evidence of the lender’s confidence in your ability to handle a mortgage, you’ll still contact your mortgage expert to have your pre-approval converted to a formal loan application once you have an accepted offer.
When Is the Best Time to Get Pre-Approved?
The best time to get pre-approved is as early as possible. It shows that you’re a serious buyer and are financially capable of closing on a home, providing confidence to sellers.
If you’re not planning on buying in the near future, still get pre-approved. The itemized loan estimate provides valuable information for budgeting and financial planning leading up to your purchase.
Pre-approvals are good for 90 days. If you’re not going to buy in that time period, just contact your lender to have your pre-approval refreshed when you get closer to house hunting.
Which Should I Choose – Pre-Qualification or Pre-Approval?
Getting pre-approved for a mortgage is the best way to go, no matter where you are in the home buying process.
As opposed to pre-qualification, pre-approval doesn’t rely on self-reported information to secure a mortgage loan. With additional verifications, it assures real estate agents and sellers that you’re a strong candidate for a home.
Although pre-approvals are a more involved process than pre-qualification, it’s worth it in the end because they’re more accurate, more detailed, and they set you up for home buying success
Happy homebuying!

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