What is the difference between pre-qualification and pre-approval?

It just makes sense for the borrower to determine what house price they can afford before spending time looking for a new home. Loan officers help borrowers discover what is an affordable home price by asking the borrower a series of questions. These questions include the amount and source of the borrower’s income, the amount of other debt obligations, and the borrower’s history of paying those debts. Based on the borrower’s answers, the loan officer can offer an opinion as to whether the borrower would qualify for a given loan.

Pre-approval generally means that documentation of the borrower’s income, assets, and credit history has been secured and submitted to the lender’s underwriter. The underwriter is the individual responsible for making the lending decision on the loan. Pre-approval is considered a stronger indication of the borrower's ability to qualify and receive financing

Back to FAQ