Mortgage Basics – Pre-qualification and Pre-approval


People use pre-qualification and pre-approval in mortgage discussions interchangeably, but the two terms mean different things. Understanding the difference between pre-qualification and pre-approval is important.

Both terms reference a homebuyer’s ability to obtain a mortgage for a certain amount. However, one does not determine if you can qualify, only that you may qualify.

When you get “pre-qualified”, a lender does not review your credit report nor make any determination if you can qualify for a mortgage loan. A lender will simply tell you the mortgage amount for you which you may qualify.

Pre-qualification requires you provide your lender with basic financial information. For example, how much you earn, how much you owe and for what, what assets you own, etc. A lender will review your overall financial situation and provide you with a preliminary estimate of what loan amount and terms for which you may qualify.

Pre-qualifying can help to understand the amount of financing you may obtain, and it is usually fairly quick and free. You will not know if you actually qualify for a mortgage until you either apply for the loan or get pre-approved.


Pre-approval is a bigger step than pre-qualification. It is also a better commitment from a lender. If you qualify for a mortgage loan, a lender will be able to provide the following:

  • Financing amount
  • Potential interest rate, with possibility of locking-in the interest rate
  • Estimated monthly payments – final figures will be determined by what property you buy because taxes and insurance are contingent upon a specific property.

Pre-approval involves submitting a mortgage application, which will provide a lender with documentation concerning your income and personal records. There will likely be an application fee to do this.

The lender obtains and reviews your credit information. The process takes longer than a pre-qualification because it is a more extensive review of your finances and credit-worthiness.

Why get pre-approved?

Getting pre-approved vs pre-qualified will most likely save you time in the home buying process because you will know how much of a house you can buy, which will narrow your search prospects.

In addition, by being pre-approved, sellers know you are a serious buyer. When there is competition among buyers for a property, you will have an edge over buyers who are not pre-qualified because the seller will likely prefer to negotiate with someone who has taken steps to secure financing. Imagine you are the seller, you receive a great offer from a buyer and notify the other parties your home is off the market, only to find out days later the buyer cannot get financing. In this scenario, your home goes back on the market and those other interested buyers may or may not be available.

If you are in Connecticut or Massachusetts, and in the market for a new home, contact us and let’s review your options. As a mortgage broker, we have access to a wide range of mortgage products and can find one that works for your unique situation.

Use our Quick Quote form on our homepage or our Get Started form. Call us at (860) 285-0635 or email Mark or Samir ( /, and we will connect you with any of our friendly, experienced team members.

“Your Mortgage Partner for Life”

Read the next article in our “Mortgage Basics” series, “APR & Points

If you know someone who would find this article helpful, please share it with them.
Join our online community by following us on Facebook!