Differences Between Pre-Qualification and Pre-Approval

Reblogger Raymond Henson
Real Estate Agent with eXp Realty of California, Inc. (lic. #01878277) DRE# 00949880

     There is a big difference between pre-qualification and pre-approval.  Pre-approval takes more work and time, but it is the way to go.  Michael Mannino  explains the difference well.  I actually have seen a buyer with a pre-qualification letter lose their deposit because the lender did not even check his job employment.  It turned out the buyer did have the job, did make plenty of money, but had a job title that was generally for part time employment.  It was a sad situation and my clients selling their home even felt bad.  Make sure your lender does the work up front. 

Original content by Michael Mannino 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 as 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 mortgage loan application and provide the necessary supporting documentation. 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.

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.


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Grant Schneider
Performance Development Strategies - Armonk, NY
Your Coach Helping You Create Successful Outcomes

Good morning Raymond Henson - great explanation.  Pre Approval is the right way to go.

Nov 29, 2019 07:20 AM #1
Barbara Todaro
RE/MAX Executive Realty - Franklin, MA
Marketing Agent for The Todaro Team

Good morning, Raymond Henson we won't take a home off the market unless the buyer has a pre-approval letter....

Nov 29, 2019 07:21 AM #2
Nina Hollander
Coldwell Banker Residential Brokerage - Charlotte, NC
Your Charlotte/Ballantyne/Waxhaw/Fort Mill Realtor

Great selection for a reblog, Raymond. So many people (including agents) don't understand the difference.

Nov 29, 2019 07:22 AM #3
Debb Janes EcoBroker and Bernie Stea JD
ViewHomes of Clark County - Nature As Neighbors - Camas, WA
REALTORS® in Clark County, WA

This is a good one to share. Many folks don't realize how easy it is to get a  pre-qualification. IMHO, it means very little. Show me the pre-approval letter and then we'll talk.  Lol. 

Nov 29, 2019 07:27 AM #4
Debe Maxwell, CRS
www.iCharlotteHomes.com | The Maxwell House Group | RE/MAX Executive | (704) 491-3310 - Charlotte, NC
Charlotte Homes for Sale - Charlotte Neighborhoods

I won't put a buyer in my car unless they've been either preapproval or prequalified. It's important to know what you can afford before you start looking at properties. 

Nov 29, 2019 01:03 PM #7
Raymond Henson
eXp Realty of California, Inc. (lic. #01878277) - Elk Grove, CA

Nina Hollander, I have to admit, it took me a while to figure it out.

Thank you, Grant Schneider,   Mr. Mannino did a good job, for sure.

Definitely a best practice, Barbara Todaro.

Agreed, Debb Janes EcoBroker and Bernie Stea JD. I have my buyers get pre-approved.  It seems prudent.

Thank you all for your input. 


Nov 29, 2019 01:08 PM #8
Wayne and Jean Marie Zuhl
Samsel & Associates - Clark, NJ
The Last Names You'll Ever Need in Real Estate

Colloquially, the two terms are often interchanged so distinguishing between them is so important!

Nov 30, 2019 06:01 AM #9
Joan Cox
House to Home, Inc. - Denver Real Estate - 720-231-6373 - Denver, CO
Denver Real Estate - Selling One Home at a Time

Raymond, great choice for a reblog, and the public needs to know the difference.

Dec 01, 2019 08:08 AM #12
Roy Kelley
Realty Group Referrals - Gaithersburg, MD

Thank you very much, Raymond, for sharing this excellent reblog selection.

Dec 01, 2019 12:24 PM #13
Raymond Henson
eXp Realty of California, Inc. (lic. #01878277) - Elk Grove, CA

Thank you Roy Kelley, but you gave me the idea. I appreciate the head's up. 

Dec 01, 2019 12:36 PM #14
Ricki Eichler McCallum
CastNet Realty - Corpus Christi, TX
Broker,GRI,ABR, e-Pro, TAHS

Great article and so many do not understand the difference.  Thanks for sharing!

Dec 01, 2019 04:08 PM #15
Patricia Feager, MBA, CRS, GRI,MRP
Selling Homes Changing Lives

Excellent re-blog!

Great! Great! Great explanation! Many agents just send offers without ever proving that the buyer was pre-approved. 

Dec 02, 2019 09:10 AM #16
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