What’s the Difference between Mortgage Pre-Qualification and Pre-Approval?

Before you apply for a mortgage, you can get pre-qualified or pre-approved. Typically, a pre-qualification gives you an estimated loan amount based on self-reported, unverified information; whereas, a pre-approval states the actual amount a lender is willing to loan you, based on verified financial documentation you’ve submitted.

A pre-qualification typically takes about 1-2 days. The lender might do a soft credit check before providing a letter with your ballpark loan estimate. Though it’s not a guarantee you’ll get the loan, it lets home sellers know you’re taking steps to follow through on an offer.

A pre-approval is a bit more involved. You’ll fill out an application and submit documents such as pay stubs, tax returns, and bank statements, and the lender will perform a credit check. Pre-approval is also not a guarantee that your mortgage application will close but it makes an even stronger case to the seller that you’ll be able to secure financing.

When searching for a new home, especially in a competitive market, consider getting pre-qualified or pre-approved to show sellers you’re ready — and able — to become a buyer. To be ready, you’ve gotta get ready.