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Pre-Qualified vs. Pre-Approved: What's the Difference?

Tammy Yamilkoski


Understanding the difference between getting pre-qualified and pre-approved is a crucial first step to homeownership. These processes not only provide insights into how much you might be able to borrow but also position you as a serious buyer in the eyes of sellers.

Read More Get Pre-Approved

Must be 18 or older to apply. All loans are subject to credit approval.

Key Takeaways

  • Pre-qualification is a quick look at what you might be able to borrow based on self-reported financial information.
  • Pre-approval involves a more thorough check, including checking your credit to give a better idea of what you can borrow.
  • A pre-approval letter can strengthen your offer on a home, showing sellers you're a serious buyer.
  • Both steps are important in the homebuying process, but pre-approval carries more weight.

Table of Contents

  1. What Does Pre-Qualified Mean?
  2. What Does Pre-Approved Mean?
  3. Key Differences Between Pre-Qualified and Pre-Approved
  4. Which Option Is Right for You?
  5. What Information Do You Need to Start the Process?
  6. Connect with FSB Mortgage

The Journey Begins: What Does Pre-Qualified Mean?

Mortgage pre-qualification is your first glimpse into the amount you might be eligible to borrow. It's based on a self-reported review of your finances without a deep dive into your credit history.

Getting pre-qualified is a straightforward process, often requiring a brief conversation with a mortgage lender or a quick online application.

Impact on Credit Score

One common concern is whether getting pre-qualified affects your credit score. In most cases, it does not, as it typically involves a soft credit check or no credit check. This makes pre-qualification a risk-free way to estimate how much home you can afford.

Taking a Step Further: What Does Pre-approved Mean?

Pre-approval is the next level in securing your next mortgage loan. Unlike pre-qualification, pre-approval involves verifying your financial information and conducting a credit check. This process is a stronger sign to sellers that you're ready to buy, making your offer more attractive.

The Importance of the Pre-Approval Letter

A pre-approval letter is a powerful tool in the homebuying process. It indicates to sellers that a lender backs your offer, significantly boosting your credibility and strength as a buyer.

Key Differences Between Pre-Qualification and Pre-Approval

The main differences lie in how detailed the review is and how serious you are as a buyer. Pre-qualification is quick and based mostly on unverified information you provide, while pre-approval is a more rigorous, verified process that offers a conditional commitment from your lender.

Pre-Qualified vs. Pre-Approved



Quick, based on self-reported financial information

In-depth, involves verifying financial information and a credit check

Credit Check

Soft inquiry or none

Hard inquiry, may affect credit score

Loan Estimate

Provides an estimate of how much you might be able to borrow

Gives a specific loan amount you're qualified for

Time to Obtain

Usually quick, can be done within minutes to a few hours

May take several days due to the detailed review process

Seller Confidence

Lower, as it shows interest but not solid backing

Higher, indicates serious intent and financial vetting

Best Used When

Early in the homebuying process, when exploring options

Ready to buy, to strengthen offers and negotiations

Which Option is Right for You?

Choosing between getting pre-qualified and pre-approved depends on how ready you are to purchase a home. If you're starting to explore, pre-qualification can help set your budget. If you're serious about buying in the next six months, a pre-approval letter will make your offers more competitive.

Special Considerations for Buyers

Consider your timeline and the current housing market. In a competitive market, pre-approval allows borrowers to close on a home more quickly, offering an edge in a competitive market. Additionally, most sellers will be more willing to negotiate with pre-approved buyers.

Note that your income and credit details will be reviewed again to confirm that everything remains the same as when you were first approved. Therefore, lenders will advise potential homebuyers not to make any big purchases until after the closing date.

Rate Shopping Without Hurting Your Credit

Worried about rate shopping affecting your credit? Multiple inquiries for mortgage pre-approvals within a short period (14-day period) are usually treated as a single inquiry. So assuming you are shopping around for the best mortgage rate with different banks, your credit will suffer little, if any, damage.

What Information Do I Need to Start the Process?

When you're ready to take the step towards a new home, you'll need:

  • Two most recent bank statements (Checking, Savings, Investments, 401(k), etc.)
  • Proof of income (Most recent pay stub covering a minimum of 30 days, retirement statements or award letters, contract for employment, etc.)
  • W2 or 1099 forms and complete tax returns from the past two years (Personal and Business)

Connect with FSB Mortgage

Ready to move forward? FSB's Mortgage team is here to guide you through the homebuying process. Choose between FSB's online application (recommended if you are ready to complete your application) or this quick inquiry form (recommended if you may need assistance completing your application).

Apply Online Get Personalized Assistance

Must be 18 or older to apply. All loans are subject to credit approval.

Meet Tammy Yamilkoski

Tammy Yamilkoski - Photo

Tammy, with over 25 years of experience in mortgage lending, has assisted thousands in achieving their American Dream. As Vice President and Mortgage Originator at the Hiawatha Branch, she's known for building lasting client relationships.

Tammy is dedicated to going the extra mile, leveraging her extensive knowledge of loan programs to secure the best options for her clients, ensuring a stress-free, on-time closing. Reach out to Tammy for expert advice today!

Call 319-730-6992
This email is not secure, please do not include sensitive financial information.

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