Pre-Qualified vs. Pre-Approved: What’s the Difference?

By 

Jake Safane

Updated March 13, 2025

Reviewed by 

Somer Anderson

Fact checked by 

Rebecca McClay

Part of the Series

The Complete Homebuying Guide

and supplying verification documents like tax returns

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While the terms pre-qualification and pre-approval are sometimes used interchangeably, they have distinct meanings and purposes.1 Typically, getting pre-qualified is more of a preliminary step to determine the size of a mortgage you could get. Meanwhile, being pre-approved means receiving conditional approval for the loan amount you’re going to borrow.

Key Takeaways

• Pre-qualification is typically based on data you submit and is more of a preliminary estimate of the mortgage size you could qualify for.
• Pre-approval is usually the more involved step and signals what a lender can offer you, though it isn’t an actual guarantee.
• While both have their purposes, pre-approval tends to be more useful for showing sellers you’re ready to buy.

Pre-Qualified

“Pre-qualification is a less involved step, with less verification steps completed in most cases,” said Phil Crescenzo Jr., Southeast division president of Nation One Mortgage Corporation. “A pre-qualification may be given with information entered from an applicant but not yet verified, such as with income or assets.”

Using this information, the lender can determine the mortgage amount that you’d likely be eligible for, without doing a hard credit pull that could hurt your credit score. It might then issue a formal pre-qualification letter or simply state the amount it’s willing to lend you.1 This process can take anywhere from a few minutes to a couple of days.

Warning

Mortgage lending discrimination is illegal. If you think you’ve been discriminated against based on race, religion, sex, marital status, use of public assistance, national origin, disability, or age, there are steps you can take. One such step is to file a report with the Consumer Financial Protection Bureau (CFPB) or the United States Department of Housing and Urban Development (HUD).2

A pre-qualification letter usually doesn’t carry the same weight to home sellers as a verified pre-approval letter. Still, sometimes buyers prefer to start with getting pre-qualified, as this can be useful for narrowing down lenders.

“If a buyer may not be ready to move forward immediately, but wants a preliminary review to get an idea of where they stack up financially while providing less information, they might only want or need pre-qualification,” Crescenzo added. “If a client didn’t want a credit inquiry, but wanted a soft pull, this could also be a reason to ask for a process that’s less involved.”

Pre-Approved

Pre-approval typically requires completing a mortgage application and the lender doing a hard inquiry to determine creditworthiness. With that information, the lender can give a more accurate estimate of what the borrower will be approved for once they’re ready to complete a mortgage application. This offer is usually good for a period of up to 60 days.3

Important

A pre-approval doesn’t guarantee the final loan amount, as the lender may learn new information during the full underwriting process that changes what it’s willing to offer.

“A pre-approval is what I call ‘show me.’ What I mean by that is let me see the real documents that I—or underwriting—will need for an approval: pay stubs, W-2s, bank statements, credit report, tax returns, etc.,” said Kevin Leibowitz, president and CEO of Grayton Mortgage. “We’re not completely underwriting the file, but it is a thorough review of a borrower’s profile.”

This thorough review can be valuable for prospective buyers, and some borrowers may prefer skipping right to the pre-approval process rather than getting pre-qualified first.

“A pre-approved buyer is more likely to win an offer over a less prepared buyer or realtor,” said Crescenzo. “The more information and detail that can be confirmed in advance, the smoother the process will be once an offer is accepted and processing begins. I would recommend a full pre-approval process whenever it’s possible and time allows.”

By pulling your credit, the lender can also better tailor the interest rate to suit your creditworthiness. Additionally, a pre-approved borrower may be able to qualify for an interest rate lock under certain circumstances, potentially in exchange for a fee. Most of the time, however, the lender will offer you a floating rate that’s tied to market conditions. You can still lock in a fixed rate after you’ve secured your mortgage, though the original rate may have changed by the time you close on the loan.

You may be able to lower the interest rate you’re offered by taking certain steps before you apply for a mortgage. “I’ve seen way too many what I call ‘skeletons in the closet’ on credit reports. Many of these items can be incorrect, and some can be addressable,” Leibowitz added. “It’s better to start the process early so that there’s time to fix/address items that were unknown or not discussed.”

Key Differences

How the pre-qualification and pre-approval processes work can vary by lender. Typically, however, getting pre-qualified and being pre-approved will differ in the following ways:

	Pre-Qualification	Pre-Approval
Mortgage Application	Not required	Required
Application Fee	None	Varies
Credit Check	Soft inquiry	Hard inquiry
Financial Data	Self-reported	Lender review
Estimated Down Payment	Varies	Required
Loan Amount	Estimate	Specific
Interest Rate Information	Not provided	Provided

Special Considerations

In some cases, buyers can benefit from getting both a pre-qualification and pre-approval. If it’s still early in the homebuying process, a pre-qualification could be worth it in order to get a rough estimate of what you’ll be able to borrow. Then, once you’re ready for a more in-depth review of your finances, you could move forward with a pre-approval. In other cases, it could make sense to skip pre-qualification.

“From our process, we only issue pre-approvals. We want to do a bit of the heavy lifting upfront to make sure that our clients are set up for success and don’t have surprises later on in the process,” said Leibowitz.

Once you’re ready to make an offer on a home, the buyer and seller typically enter into a purchase agreement. Borrowers would then provide a copy of this and any other documents that the lender may request as part of the full underwriting process. Additionally, the lender will then hire someone to conduct a home appraisal to help them ascertain the value of the home.4 

Finally, if all goes well, you’ll receive a mortgage commitment letter. This is a formal offer from the lender to loan you a certain amount, though this can be retracted if your financial situation changes or either you or the property are later found to have fallen short of the lender’s qualifications.5

The Bottom Line

Getting pre-qualified and pre-approved can help you determine what kind of home you can afford. Pre-qualification is usually the simpler step, but it offers less certainty over how much the lender will actually approve you for. As such, consider getting a pre-approval before you start trying to negotiate with a home seller.

Article Sources

Part of the Series

The Complete Homebuying Guide

The Complete Homebuying Guide

Getting Started

Budgeting

Finding Your Home

Protect Yourself

Mortgage Basics

1.   How to Choose the Best Mortgage for You
2.   Mortgage Preapproval
3.   Prequalified vs Preapproved CURRENT ARTICLE
4.   Getting A Mortgage When Building Your Own Home
5.   Top Mortgage Mistakes

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