• Home / 
  • Learn / 
  • Mortgage Pre-Qualification vs Pre-Approval – What’s the Difference?
Dan Green

Dan Green

Since 2003, Dan Green has been a leading mortgage lender and respected industry authority. His unwavering commitment to first-time home buyers and home buyer education has established him as a trusted voice among his colleagues, his peers, and the media. Dan founded Homebuyer.com to expand the American Dream of Homeownership to all who want it. .

Image Of A First-Time Home Buyer Getting Their Mortgage Pre-Approval Online Using A Branded Computer

How We Make Money

Homebuyer.com is your trusted guide to homeownership. Since 2003, our team has offered real-world expertise and advice to tens of millions of U.S. home buyers. Our content stands on its integrity: it's factual, unbiased, and free from outside influences. Read our editorial guidelines.

Homebuyer.com is a mortgage-company-affiliated publisher. We earn compensation when you click specific links on the website, or apply for a mortgage with Homebuyer.com or a partner listed in our comparison tables. Our partners compensate us differently, so we randomize our tables to protect our readers from steering. We may also earn compensation for advertisements on the site, which are indicated clearly. Note that limitations in our software, whether we originate mortgages in your area, and credit factors may affect the offers and comparison tables you see on various parts of this site. We do not include offers for every mortgage product available. Someday, we hope we will.

Trusted Content

Trusted Content

This article was checked for accuracy as of February 3, 2024. Homebuyer.com ensures every piece of information we share reflects the latest in mortgage standards. Learn more about our commitments in our editorial guidelines.

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

Pre-qualifications and pre-approvals are how mortgage lenders determine whether your mortgage will get approved and how much mortgage you can give.

The terms pre-qualification and pre-approval are not interchangeable.

A pre-qualification is a mortgage approval based on self-reported information. It doesn’t verify a buyer’s credit score, income, or money in the bank. It’s an estimate only.

A pre-approval is mortgage approval based on verified data. It uses credit reports, job data, and bank information to confirm how to approve your loan and for how much money.

Needless to say, pre-approvals are for serious home buyers. Pre-qualifications are for pretenders. It’s why many home buyers get pre-approved before they begin searching for homes.

Pre-approvals signal to sellers that you’re an approved, motivated buyer who can afford to buy their home. Pre-qualifications send negative signals and should be avoided.

This table breaks down pre-qualification vs. pre-approval.

Verifies home buyer incomeYesNo
Verifies home buyer employmentYesNo
Verifies home buyer credit scoreYesNo
Accepted by home sellersYesNo
Accuracy level100%0%
Mortgage Pre-Approval & Pre-Qualification [First-Time Home Buyers]

What is a Mortgage Pre-Qualification?

A mortgage pre-qualification is an estimate of your ability to borrow money. It’s a shortcut for lenders and buyers to assess whether your mortgage will be approved.

The five questions in a first-time home buyer pre-qualification are:

  1. Where do you live now and what is your rent?
  2. What is your annual household income?
  3. What is your credit rating?
  4. Have you had a recent bankruptcy?
  5. Do you plan on making a downpayment?

Home buyers can answer the pre-qualification questions with the truth, lies, or a version that’s in-between. The lender will not verify the information provided nor ask for proof.

Pre-qualifications are unverified estimates of a person’s home-buying power.

The advantage of getting pre-qualified to buy a home is that it’s quick. The disadvantage is that a pre-approval is inaccurate, unhelpful, and set poor expectations – especially for first-time home buyers.

Pre-qualifications are appropriate when buying a home with bad credit or some other job or credit anomaly. Pre-approvals are better at turning people down than getting them approved.

What is a Mortgage Pre-Approval?

A mortgage pre-approval verifies that a buyer can purchase and finance a home.

Pre-approvals are reliable. They consider a buyer’s credit, income, and assets; and use that information to conditionally approve a mortgage.

Six verifications comprise a mortgage pre-approval:

  1. Verification of name, address, and phone number
  2. Verification of credit score and credit history
  3. Verification of income and employment history
  4. Verification of assets and savings
  5. Verification of citizenship and eligibility
  6. Verification of debts and remaining loan payments

In addition, for VA loans, lenders will verify VA benefits eligibility and, for USDA mortgages, they’ll verify USDA property eligibility.

Mortgage pre-approvals use hard credit inquiries and, when digital data is unavailable, lenders verify with W-2s, paystubs, tax returns, and personal bank statements.

Pre-approvals are dress rehearsals for a final mortgage approval.

When your mortgage is pre-approved, you know exactly how much home you can afford to buy and for what mortgage rate you’re expected to qualify. You’ll also get a verified estimate of your mortgage closing costs and a projection of your monthly payments.

Lastly, pre-approved home buyers receive a pre-approval letter, sometimes called a Verified Approval Letter. A Verified Approval Letter tells home sellers that you, as the buyer, can purchase and finance their home.

Home sellers don’t accept offers without an accompanying Verified Approval Letter.

Get pre-approved to get a letter now.

What’s the Difference: Pre-Approval vs. Pre-Qualification

The difference between a pre-approval and a pre-qualification is that a mortgage pre-approval is verified and reliable. By contrast, a mortgage pre-qualification is fantasyland.

Pre-qualifications rely on self-reported information. Pre-approvals use official, recognized data.

Here’s a side-by-side comparison:

Verifies a home buyer’s income using government mortgage standards, including depreciation add-backs and government benefit multipliersUses the home buyer’s estimates of their annual income
Verifies a home buyer’s assets and savings using government mortgage standardsUses the home buyer’s estimates of the assets and savings
Performs a credit review to find revolving and long-term debtsUses the home buyer’s estimates of their monthly bills and obligations
Verifies a two-year history of housing payments to calculate for payment shock and other anomaliesDoes not calculate for payment shock and other mortgage disqualifiers

Pre-approvals do four things that pre-qualifications do not:

  1. Pre-approvals affirm that a buyer can get financing on a home
  2. Pre-approvals set a buyer’s maximum purchase price
  3. Pre-approvals keep a buyer within their budget
  4. Pre-approvals strengthen a buyer’s offer to a seller

Pre-approvals are dress rehearsals for a buyer’s final mortgage approval. A pre-approved buyer can move forward with confidence toward their American Dream.

Pre-qualifications add nothing. They’re a false vote of confidence.

Get the real deal. Get pre-approved now.

What Do You Need to Get Pre-Approved?

Getting pre-approved for a mortgage is a breeze. Homebuyer.com gives pre-approvals online, in just three minutes, in our automated mortgage pre-approval center.

To get pre-approved with Homebuyer.com, most buyers won’t need documentation. Income and asset verifications are performed digitally, which saves you time and money, and credit checks are performed instantly and free of charge.

Other mortgage lenders offer mortgage pre-approvals, too.

With other mortgage lenders, home buyers should expect to provide supporting financial documentation, including W-2s, paystubs, bank statements, and federal tax returns for all buyers whose credit will be used for the loan.

Additional documentation will be required to pre-approve home buyers using a co-signer to buy their first home. Your lender can assist with questions.

Different mortgage companies will ask for different pre-approval documentation; some requests may feel onerous. Remember: a lender will only ask for its minimum required documentation, so respond to requests quickly.

Which Should I Choose: Pre-Qualification or Pre-Approval?

In every scenario, getting a pre-approval is better than getting pre-qualification for current and future home buyers. Pre-approvals are accurate and valuable. Pre-qualifications are a nothing.

Pre-approvals are the start of every successful home purchase.

Buyers with pre-approvals stay within budget, shop with confidence, and get a Verified Approval Letter so sellers know they’re serious.

Pre-qualified buyers get none of these benefits.

Start your mortgage approval today with a proper pre-approval. Use the Homebuyer.com mortgage approval center and get started on your path to homeownership.

Click here to get pre-approved.

Mortgage Pre-Approval FAQ

How long does it take to get pre-approved?

Mortgage pre-approvals can be issued online, in just three minutes, using the Homebuyer.com mortgage approval center. Manual pre-approvals issued by retail banks may require several hours or days.

Why does everyone say I need a mortgage pre-approval? I just want to shop for homes.

Mortgage pre-approvals create a framework for buying your first home. A proper pre-approval tells you in what price range you should be shopping and helps you fine-tune your home-shopping budget. Pre-approvals show you how a lender sees your finances to help you buy a better home.

Is a Verified Approval Letter an actual mortgage approval?

No, a Verified Approval Letter is a mock loan approval based on a fictitious home at a specific price. When a seller accepts your offer to buy their home, your mortgage lender will substitute that home’s information into your application which converts your pre-approval into an actual mortgage approval.

When should I get try to get pre-approved to buy my first home?

The best time to get a mortgage pre-approval is at the very start of your home-buying journey or as soon as possible afterward. Getting pre-approved early leaves time to improve your credit score, if necessary, and to make other budget adjustments.

How long does a pre-approval last?

Pre-approvals are good for 90 days. If your home search lasts longer than 90 days, your lender can refresh it quickly. Learn more about how getting pre-approved for a mortgage affects your credit score.

Approve Your Mortgage - Instantly!

Wave goodbye to waiting times and say hello to our Immediate Mortgage Approval. It's more than just a mortgage - it's your ticket to home-buying freedom, available anytime you are. With ultra-low rates at your fingertips, the power to secure your future is just a click away. Why wait for office hours? Your home doesn't.

       Mortgage pre-qualifications and mortgage pre-approvals are different. One is useless for a first-time home buyer. The other is invaluable as a house-hunting tool. Let's dig in.

Find out what you can purchase today

© 2021-2024 All rights reserved. Growella Inc d/b/a Homebuyer. Homebuyer.com is powered by Novus Home Mortgage, a division of Ixonia Bank, NMLS 423065. www.nmlsconsumeraccess.org Homebuyer is located at 230 Findlay Street, Cincinnati, Ohio 45214. Novus Home Mortgage, a division of Ixonia Bank, is located at 20225 Water Tower Blvd. Suite 400, Brookfield, WI 53045. We have no affiliation with the US Department of Housing and Urban Development, the US Department of Veterans Affairs, the US Department of Agriculture, or any other government agency. US Government agencies have not reviewed this information and this site is not connected with any government agency. Equal Housing Lender. Applicant subject to credit and underwriting approval. Not all applicants will be approved for financing. The receipt of the application does not represent an approval for financing or interest rate guarantee. Restrictions may apply.