Differences Between Pre-Qualification and Pre-Approval

Mortgage and Lending with Harbor View Funding NMLS# 1149616

Getting pre-qualified or pre-approved for a mortgage loan gives you more concrete information about what you can and can’t afford.  However, the terms are very different and are misunderstood by many.


Here are what those terms really mean.



Getting pre-qualified for a loan is a very easy process. It’s an initial evaluation of your creditworthiness. You provide the lender your approximate income, the amount of debt you’re carrying, and any other important details from your credit history. The lender uses these figures, which have yet to be verified, to calculate how much money you might be eligible to borrow. The lender may provide you with a pre-qualification letter, which has more details about your likelihood of obtaining a loan.

However, all information you provide during pre-qualification is subject to verification by the lender when you submit your actual loan application. There is no guarantee of a mortgage loan, as your financial situation has not been verified.

Many sellers are educated on this by their real estate agents and ignore pre-qualification letters from lenders.



Pre-approval means that your financial situation has been verified by the lender. It’s more involved than pre-qualification but still relatively simple.

You will have to fill out a loan application and provide the necessary supporting documents required for a home loan. The lender will examine your financial situation—your credit report, your employment history, your income—and decide what interest rate to offer and the maximum amount you would be permitted to borrow based on your debt to income ratio.

Although pre-approval provides more certainty to a borrower than pre-qualification, it also does not guarantee a mortgage loan. That involves other conditions, such as an assessment of the property you want to purchase or one that you’d like to renovate.

Before you make plans to spend your mortgage loan, make sure you know how much you can expect to borrow. Talk with your lender and get a professional examination of your financial situation. 


Be sure to visit our blog for more informative posts like this.


Contact Us:

Harbor View Funding

Address: 17541 E 17th St, Suite 207
Call Us: (949) 309–2400

Comments (3)

Roy Kelley
Retired - Gaithersburg, MD

This is very good information to share with prospective mortgage borrowers.

Nov 25, 2019 04:40 AM
Michael Mannino, CPA

Thank you Roy Kelley!  Appreciate the kind words.

Nov 29, 2019 02:11 PM
Ray Henson
eXp Realty of California, Inc. (lic. #01878277) - Elk Grove, CA

I agree with Roy Kelley so I shared your article on my FB business page, LinkedIn and Twitter.  I will re-blog shortly.  Thank you for the good info.

Nov 29, 2019 07:01 AM
Michael Mannino, CPA

Thank you Raymond Henson for the encouragement and for sharing.  Much appreciated!  Hope you had a great Thanksgiving.

Nov 29, 2019 02:12 PM
Patricia Feager, MBA, CRS, GRI,MRP
Selling Homes Changing Lives

Michael - What a great, great explanation and graphic at the top! I sincerely hope this one gets FEATURED by ActiveRain!!!

Also, welcome to ActiveRain! You're off to great new beginnings with others in the Real Estate Industry!

Dec 02, 2019 09:17 AM
Michael Mannino, CPA

Thank you so much Patricia Feager, MBA, CRS, GRI,MRP!  I tried to be short and to the point.   All the best and thank you for the support!

Dec 02, 2019 11:12 AM