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Pre-Approval or Pre-Qualification?


Article by Eric Robb

Photography by Unsplash Photos

When buying a home you’ve heard that you will need to Pre-Qualify or be Pre-Approved for a mortgage. These are two very important steps in the mortgage application process and although the terms are often used interchangeably there are important differences that buyers should know. One of our experiencedRobb Realty Group agents can sit down with you and guide you through the home buying process.

The first step in the mortgage application process is to get Pre-qualified, which gives an idea of how large of a loan the buyer qualifies for. The second step in the process is Pre-Approval, which is a conditional commitment that the lender provides before they grant the mortgage.

The pre-qualification process is based on data provided by the buyer while Pre-Approval is verified consumer data such as a credit check.

Important Factors:

  • Pre-qualification is based on data the borrower submits to the lender. This data is analyzed by the lender and then he is able to provide a ballpark estimate as to how much they can borrow.
  • A Pre-qualification is not a sure thing and is based on unverified information that the buyer provides.
  • Once they’ve been Pre-Approved, the borrower will receive a conditional commitment in writing for an exact loan amount.

A Pre-Qualification is quick and is based on the buyers overall financial picture including debt to income and assets. The lender reviews what the buyer submits and provides an estimate of how much the borrower can receive. This is a quick and dirty assessment and can usually be done over the phone at no cost. However, because it is a quick assessment it does not include in-depth information and there has not been a credit check which are factors that will greatly contribute to a borrower’s ability to purchase a home. The Pre-Qualification is not a sure thing and is only based on information the buyer has provided so a Pre-Qualified buyer doesn’t carry the same weight as a Pre-Approved buyer who has had his assets thoroughly investigated.


A Pre-Qualification is a good indication of the ability to borrow, however a Pre-Approval is the next step where the borrower must complete an official mortgage application with all of the necessary documentation. The Pre-Approval results in the lender providing a specified purchase amount for the buyer and the lender will provide a conditional commitment in writing. Being Pre-Approved puts the borrower at an advantage to the seller because they’re one step closer to getting an actual mortgage.