Pre Approved vs. PrewualifiedWhen buying a house with a mortgage, you have the opportunity to get the process started before you actually need a loan. Most banks offer the ability to get pre qualified or get pre-approved. While these two processes are similar, they are actually not the same thing and will provide you with different benefits.

Home Loans: Pre-Approval vs Pre Qualification

The big difference between pre-approval and pre qualification in the mortgage industry is in the level of fact checking that goes on. With a pre-qualification, you do not provide any specific details that can be verified by the mortgage lender. It is a very non-committal process that basically just tells you how much you can borrow. With this approach, you tell the mortgage lender about how much money you make and what your credit history is. Then the mortgage lender tells you that, based on this information, you could get approved for a mortgage at a certain amount.

By comparison, with pre-approval, the lender actually verifies all of your information on the front end. For example, the lender will look at your employment situation and verify that you make a certain amount of money. The lender will also pull a copy of your credit report to make sure that your credit history is good enough to get approved. At the end of the pre-approval process, the lender will tell you whether you are approved for a loan or not. If you are approved, the lender guarantees that you can get a loan within a certain amount of time.

Once you have a pre-approval, you know exactly how much money you can borrow from the mortgage lender. With this information, you can narrow down your options when shopping for a house. This way, you’ll be able to eliminate with certainty some houses from the market.


Pre-qualification is a good step to take if you’re just in the beginning stages of shopping around for a house. If you are sure that you want to buy a house in the near future, going through the process of getting pre qualified could make things easier when you find the house you want. If you are pre qualified, you may seem like a more attractive buyer. Some sellers will give you preference if you’re trying to buy a property that is popular on the market. While it does take a little bit more time to complete, pre qualification gives you a little more clout as a buyer.