What Is The Difference Between Pre-Qualification And Pre-Approval?

Posted by Eric Peterson on Thursday, June 13th, 2019 at 5:21pm.

Getting pre-qualified or pre-approved should be your first step towards buying a home. Here’s what the difference is between the terms.


Pre-qualification is the initial calculation done to estimate how much you are able to borrow from a mortgage company. Sometimes this is done by a mortgage banker/broker and it is also possible to receive a pre-qualification from an online lender. To receive a pre-qualification you will provide information about your income, debts and assets. Based on that information provided the lender will calculate an amount you can borrow. For a pre-qualification there is no verification done, the lender is only going off the information you provide. There is no guarantee the lender will make you a loan because the information has not been verified.


A Pre-approval means your financial situation has been verified by the lender. You have completed a mortgage application and provided the supporting documents the lender requires. Often this included employment information, paystubs and bank statements. After your information is received by a lender an underwriter will review your loan application and issue the pre-approval. When buying a home the pre-approval is stronger than a pre-qualification. In most cases a seller will want to see in writing that you are able to buy their home. Being able to present a pre-approval makes your offer more attractive compared to a buyer who is only pre-qualified.    


If you need a recommendation to start the process and receive a pre-qualification or pre-approval at no cost to you contact us at 512-791-7473 or eric@koparealestate.com and we will connect you to a trusted local lender.


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