Mortgage Pre-Qualification vs. Pre-Approval: What’s the Difference?
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Chelsea Levinson, Contributing AuthorClose
Chelsea Levinson Contributing AuthorChelsea Levinson, JD, is an award-winning content creator and multimedia storyteller with more than a decade of experience. She has created content for some of the world’s most recognizable brands and media companies, including Bank of America, Vox, Comcast, AOL, State Farm Insurance, PBS, Delta Air Lines, Huffington Post, H&R Block and more. She has expertise in mortgage, real estate, personal finance, law and policy.
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Jedda Fernandez, Associate EditorClose
Jedda Fernandez Associate EditorJedda Fernandez is an associate editor for HomeLight's Resource Centers with more than five years of editorial experience in the real estate industry.
If you’re gearing up to buy a home, you might be confused by some of the mortgage terminology you encounter. Like pre-qualification or pre-approval. You have a vague idea that at some point in your journey, you’re probably going to need at least one of them. But what exactly are they? What’s the difference between them? And is one stronger than the other?
Let’s lay it all out:
How pre-qualifications and pre-approvals are similar
Pre-qualifications and pre-approvals have a few things in common. They can both act as documentation for you to take to home sellers to show that you’re likely to be approved for a mortgage. They both estimate the size of the home loan you can expect to get. And they both help you make a more competitive offer than you could without any lender documentation. In fact, many sellers require either a pre-qualification or pre-approval letter before they’ll even consider your offer.
Before jumping into the differences between pre-qualifications and pre-approvals, you should understand that neither guarantees a mortgage or an accepted offer. Think of them as important first steps to getting into the home of your dreams.
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What’s a pre-qualification?
Getting a pre-qualification is often the first thing you do when you’re ready to secure home financing. Typically, to get a pre-qualification, you simply provide a lender with an estimated overview of your financial picture. That includes your income, assets, debts, and credit score. Filling out the pre-qualification form should take just a few minutes. Most lenders have them readily available online.
The catch with the pre-qualification is that your information is not checked or vetted. You don’t need to provide any documentation. You simply fill out a form online, by phone, or in person. And voila, within minutes, you have a pre-qualification.
While a pre-qualification can certainly help you make a stronger offer on a home, having one is never a guarantee that your mortgage loan will be approved. There are many reasons for this, but the primary reason is that your lender has not yet thoroughly reviewed your financial information. At this stage, they can’t possibly know whether it’s worth the risk to lend to you.
For example, say you obtain your credit score from a credit estimator site. Then you actually apply for the mortgage and learn that your official credit score is lower than you realized. This could disqualify you for the loan.
What’s a pre-approval?
A pre-approval is a step up from a pre-qualification. A pre-qualification is more of an estimate, while a pre-approval is more of a true conditional loan approval issued after your income and assets have been fully underwritten.
Getting ready for pre-approval is all about preparation. To help you speed up the process, gather these documents before you apply.
The pre-approval documentation checklist
| Document Type | Specific Items to Gather | Purpose |
| Proof of Income (W-2 Employee) | W-2 statements from the last two years | Verifies your consistent employment and earned wages. |
| Proof of Income (All) | Pay stubs from the last 30–60 days | Confirms current income, bonuses, and deductions. |
| Proof of Income (Self-Employed) | Full tax returns (including all schedules) from the last two years | Assesses the stability and deductibles of your business income. |
| Assets & Down Payment Funds | Bank statements and investment account statements (last 60 days) | Verifies you have the funds available for the down payment and closing costs. |
| Debts and Liabilities | Statements for auto loans, credit cards, and student loans | Allows the underwriter to calculate your Debt-to-Income (DTI) ratio. |
| Identification | Government-issued photo ID (driver’s license or passport) and Social Security number | Required for identification verification and running the necessary credit check. |
While a pre-approval can give you more confidence in the home buying process, it still doesn’t guarantee you a mortgage. It’s merely an important step, and one that can give you an advantage, especially in a competitive market.
Why a strong pre-approval gives you an advantage
Sellers are always looking to select the strongest offer possible. No seller wants to go through the frustration of accepting an offer, only to have the deal fall through because the buyer couldn’t secure proper financing. This is why so many home sellers favor cash: it’s a sure thing.
Say a home seller is assessing three offers. Two of the offers are from buyers with pre-qualification letters, and one buyer has gone through the pre-approval process. There’s a good chance the seller will choose the pre-approved buyer, because they’ve already had their financials assessed. This takes an unknown out of the equation and gives the seller more certainty in closing the deal.
Hard pull vs. soft pull: The credit score impact
One of the most common questions we get is, “Will checking my credit hurt my score?” The answer depends on the stage you’re in.
- Prequalification is a soft pull: Getting prequalified usually involves a soft credit inquiry (or soft pull). Your lender reviews your credit report but doesn’t run a formal, intensive check. The great news is that a soft pull has no negative impact on your credit score, making it a stress-free way to get an initial estimate of your buying power.
- Pre-approval is a hard pull: To get a binding pre-approval, your lender must run a hard credit inquiry (or hard pull). This is a formal check that shows up on your credit report and usually causes a small, temporary dip in your score — typically just a few points. This is completely normal and expected when you are serious about applying for a mortgage. The impact is minor and short-lived, so don’t let it stop you from getting that strong pre-approval letter!
The underwriter’s role: What happens after you submit documents?
Once you’ve gathered your paycheck stubs, W-2s, and bank statements and sent them off to the lender for pre-approval, your file gets handed off to the real gatekeeper: the loan underwriter. Think of the underwriter as the meticulous detective of the mortgage world.
Their job isn’t to judge you, but to verify absolutely everything. They check the authenticity of every document you submitted, confirm that your income is stable enough to cover the new mortgage payment, and assess your overall risk profile based on your credit history. They’re essentially saying, “Yes, we trust that the money you say you have, you actually have, and that the risk of lending to you meets our criteria.” This rigorous, conditional approval from the underwriter is precisely why a pre-approval letter holds so much weight with sellers!
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Knowing your budget is just the first step; the next is finding the right home and securing the best deal. Once you have your pre-approval in hand, HomeLight can connect you with top-rated buyer’s agents in your area who specialize in helping clients purchase homes within their validated price range and financing requirements, ensuring your confidence in securing the perfect property.
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