What’s the Difference between Mortgage Pre-Qualification and Pre-Approval?

By Jon Miller, Realtor®

Before buying a home, you’ll need to secure your financing by talking with a lender. When you talk with the lender, you’ll go through either a pre-qualification or a pre-approval process. The terms are used interchangeably. For our purposes, we’ll look at them as pre-qualification being the less thorough of the two options.


Loan Pre-Qualification provides a ballpark estimate of your target price range, purchase costs, and monthly payments based on unverified information provided to the lender. Essentially, the lender will provide the Pre-Qualification based on what you tell them but they won’t check your credit rating. If you’re considering buying a home in the next 6-12 months, Pre-Qualification may be all that you need to get started.

For anyone at the very beginning of the home search process, this can be the best place to start. It’s relatively quick and easy. Getting Pre-Qualified will help you narrow down your price range. This will allow you to eliminate a large number of homes so you can more easily narrow down target areas. After getting Pre-Qualified, you may find that you’re either closer to ready than you had thought or that you’ll be more comfortable saving a bit more money before making your purchase.

It’s easy to get Pre-Qualified online, but I don’t suggest doing it this way. You’ll be required to input your contact information so that a lender can call you. This may or may not be what you want, but it will happen. It’s a way for lenders to get your business. The lender may not be local and may not know the specifics of how business is done in your area. And, by talking with an experienced local lender, they will be able to provide you with a lot of information on various loans so you can  choose the best option for your needs.

If you get Pre-Qualifed based on a minimal amount of information provided online, important questions that can greatly impact the pre-qualification amount aren’t being asked. My advice is to talk with a local lender who will ask the right questions so that you can have as clear of a picture as possible. This will help you avoid surprises and help you to be reasonably sure that you’re looking in the right price range.



Mortgage Pre-Approval is more thorough than Pre-Qualification. When you go through this process, the lender will require some paperwork and they will run a credit check. In most cases, offers aren’t taken very seriously if you only have a Pre-Qualification so you’ll want the Pre-Approval when you get close to buying. If your plan is to buy a home within the next 6 months, you should get a Pre-Approval (again, lenders will use the terms interchangeably, you’ll want the more thorough of the two).

The #1 reason for going through the Pre-Approval process as you get ready to buy your home is that it will give you the most accurate picture of your target price range so you can be sure that you’re looking at the right properties. The second most important reason is that it may take a few days, or longer, to get your lender everything they need. In many areas homes sell fast and offers can come in on the first day.

If you’re looking for a house in a hot area and something pops up that looks like a great deal, you can almost guarantee that others think that it’s a great deal, too. If it takes you a few days to get the Pre-Approval, the house may be gone (I’m not just saying this because I’m a real estate agent, I really do see it happen all the time). Also, if you end up in a multiple offer situation, a Pre-Qualification Letter instead of a Pre-Approval Letter may put your otherwise great offer out of the competition.


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Jon Miller, RealtorJon Miller is a Philadelphia Realtor with Compass Real Estate. Jon has been working with home buyers and sellers in Philadelphia and Montgomery County since 2010.