Mortgage News

Pre-Approval vs. Pre-Qualified


Apples and Oranges

These two terms get thrown around a lot and it becomes very difficult to figure out the differences between being Pre-Qualified for a loan and Pre-Approved for a loan. There is a BIG DIFFERENCE.

So, let’s clear up the confusion…


When you are Pre-Qualified it means the lender believes you qualify for a loan based on assumptions about information provided by you, or a different source. In some cases you ma be a previous client and they are working under the assumption that all of your qualifying characteristic (Credit Score, Income, Home Value, etc., etc.) have remained the same.

However, the Lender has verified none of these facts at this point. Therefore, the Pre-Qualification is subject to change once documents are submitted.

As a result, many Realtors will not accept a Pre-Qualification letter as the approval is based on assumption and not fact. It’s great to know you’re Pre-Qualified, but it doesn’t guarantee you’ll be approved.


When you are Pre-Approved it means you have submitted documentation to support income, assets, and credit to the Lender. The Lender has reviewd the documentation and has issued a Pre-Approval based on the review of this documentation.

A Pre-Approval is generally what a Realtor requires to make an offer due to the fact that a Pre-Approval means the Lender has reviewed your documentation and has offered uo a loan approval based on fact, not assumption.

The Truth

It’s great to have both options available to you. Here is when you want to utilize each option:

Pre-Qualification – This is a great option when you’re in your initial researching and comparison phase. It gives you a good idea of what’s available to you without giving out your personal information.

Note: It’s important to use accurate information when obtaining a Pre-Approval. It won’t help you to say have “GREAT CREDIT” when you know there have been some bumps and bruises. They will verify the information and it’s better to collect quotes for loans you actually qualify for.

Pre-Approval – This is the option you’ll want to utilize when you’re ready to secure a loan. If you’re planning on making an offer on a home you’ll want to be pre-approved because it will lend much more credibility to your offer if the Seller knows you are qualified to purchase the home. Realtors generally want you to be Pre-Approved prior to making an offer.

Call me for more information and details: 305-206-5144


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