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The Difference Between Pre-Qualified & Pre-Approved Home Loans

Pre-Qualified & Pre-Approved Home Loans

One of the first rules of home buying is be prepared. Knowing the difference between pre-qualifying for a mortgage and being pre-approved is a key step in the home loan process, and can save you from disappointment when trying to find your dream home.


A mortgage loan pre-qualification is the initial assessment of a potential homebuyer. Simply stated, it's an estimate of how much house you can afford and how much money a lender would be willing to loan you. This usually involves a conversation with a lender, or filling out an online form, with information regarding your income, assets and debts. The best time to determine pre-qualification is before you even begin looking for a house. Once you know your pre-qualification amount, you can discuss various mortgage options and allow the lender to make recommendations. There's no cost involved, and no commitment, but keep in mind the number is a ballpark estimate and should be used as a guideline for your home search, not a finite number.


One you're pre-qualified and ready to house hunt, you'll want to get pre-approved. This involves more information shared between you and the lender. You'll fill out an official mortgage application, and then supply the lender with documentation to perform an extensive check on your financial background. There is usually a fee involved with getting pre-approved, since the lender will look at your credit score and take time to verify your employment and financial history.

Once the lender has this information, they'll be able to tell you the specific mortgage amount you qualify for. You'll also have a better idea of the interest rate on the loan and receive a written commitment for an exact loan amount, allowing you to begin the house hunt. Getting pre-approved before you put an offer on a house is a sign of encouragement for home sellers, as they know you're able to move quickly in obtaining a mortgage. Still, it's important to note that pre-approval is not a guarantee of a mortgage loan. Verifications of the home, including a property appraisal and title search must check out before a lender will sign off on a mortgage.

Both pre-qualification and pre-approval are important steps in your home search. By accepting your pre-qualification amount, you'll be able to focus your energy on finding a home in your price range. Armed with a pre-approval, you'll be able to make an offer, confident that you're one step ahead when the time comes to purchase your dream home.

Citywide Home Loans makes the loan process simple. Visit to see how much home you can afford and find a loan program that's right for you.