Week 18 – Pre-Approval vs. Pre-Qualification: What's the Difference?
If you're thinking about buying a home, chances are you've heard the terms "pre-qualification" and "pre-approval." While they sound similar, they mean very different things when it comes to getting a mortgage.
Pre-qualification is a quick, often informal process where a lender gives you a rough estimate of what you might be able to borrow based on basic information you provide—like your income, debts, and credit score range. It’s a good first step, but it’s not a guarantee.
Pre-approval is a more serious process. The lender will verify your income, credit, assets, and employment to issue a conditional loan approval. A pre-approval letter makes your offer stronger and shows sellers you're a serious buyer.
If you're ready to start house hunting, getting pre-approved first gives you the edge in a competitive market.