When you think you’re ready to buy a house, you think the first step would be looking for the house, right? Wrong.

Getting a pre-approval letter should be the first. As fun as looking through houses online can be, nothing is more crushing than finding your dream home only to find out you can’t afford it. Not to mention, most real estate agents won’t even bring you out to see houses until they know you’re pre-approved.

The sooner you get pre-approved, the better. This allows for time to get any credit issues that you might have in order. It also helps you get a better idea of what you might need to have saved up.

So you go to your lender and ask about getting pre-approved, and they mention getting pre-qualified. Isn’t it the same thing? To some lenders it is – the terms are used interchangeably. But to others, there is a difference.

Pre-Qualification vs. Pre-Approval


The biggest difference between pre-approval and pre-qualification, at least from a lender’s point of view, is validating information with documents, as opposed to just getting verbal information.

A pre-qualification does not require documentation – the lender will ask about your income, assets, credit, and work history and give you estimated loan amounts based on that. The key here is that they are all just estimates. Pre-qualifications do not pull credit and therefore rate information cannot be given.

A pre-approval letter is more official. When getting pre-approved, the lender will ask for documentation to verify income and assets, as well as pull a credit report. Having the credit report also allows the lender to get rate estimates. It’s important to understand, however, that until you are locked in during the loan process, the rates can change daily. Once you are pre-approved, and have a plan to get any savings required together, you will be in a better place to begin looking up houses with confidence that you can afford them.

It is important to understand, however, that even a pre-approval is not a guarantee that you will be approved for a mortgage loan.  The funding will only be given when the property appraisal, title search, and other verifications check out on the home you have chosen to buy.


Have further questions regarding this topic? Give me a call, I’m happy to help!


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