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Pre-Qualification and Pre-Approval

What’s the difference between being “pre-qualified” versus “pre-approved” for a mortgage? This topic is the source of much confusion in the market. We’re here to help sort things out.


Pre-qualification is one of the first steps in the mortgage process. You supply your overall financial picture, including your debt, income, and assets. After evaluating this information, a lender can give you an idea of what you can afford as a homebuyer. Pre-qualification can be done in consultation with a loan officer and typically requires minimal documentation. However, it is not a guarantee that you will receive financing.


The pre-approval process is a more in-depth review of your financial background. You'll complete an official mortgage application and supply the lender with necessary documents. From this, you will receive a letter with the mortgage amount for which you have been pre-approved. You can shop with confidence, knowing you have your financing in place. 

Know Your Budget

Getting pre-approved means that you will have a clear picture of the credit you have available to you to purchase your new home, as well as your price range.  This will prevent you from spending time looking at homes that may be out of your budget and perhaps getting attached to a home that you cannot afford.

Close Quickly

Getting pre-approved for your mortgage means that you can act more quickly once you find the home that is right for you.  The process of getting the mortgage approved is generally the longest and most complicated process in any home purchase.  It requires verification of your income and employment, an evaluation of your credit reports, and the completion of a loan application. Having this step completed can save weeks of time in the closing process.  Pre-approval also means that you have an advantage should a bidding war begin.  The seller can be confident that you can afford the bid you are making and that you can move quickly to finalize the sale.

Overall, there are a number of benefits to getting pre-approval for your mortgage before beginning the search for your new home. Most importantly, it can give you peace of mind in knowing that you are ready and able to make the commitment to homeownership, and that you are not wasting your time in looking at properties that you may not be able to afford.