The Difference Between Pre-Approval & Pre-Qualification


MARSHFIELD, WI (OnFocus) – Real estate agents often suggest to buyers that they become “pre-approved” or “pre-qualified” before beginning the home search process. While these mortgage terms sound similar, they carry very different meanings. Fairway Mortgage in Marshfield works with buyers on all stages of the home buying process and can explain these important terms.

“For a homebuyer, a pre-approval letter is more beneficial to have in the homebuying process than a pre-qualification letter because it indicates a more serious offer to the seller,” explained Josh Kilty, Fairway Mortgage.

A mortgage pre-qualification is an initial assessment by a lender of a borrower’s ability to qualify for a mortgage loan. When buyers are pre-qualified, the credit report may or may not be pulled, and information about employment, income, assets, and liabilities is given to the lender by the borrower.

“However, none of this information is verified by the lender, which makes it less accurate than a pre-approval. In the case of a pre-qualification, the lender is reliant on the buyer to provide an accurate estimate of these items,” said Kilty.

In contrast, A pre-approval is determined after the lender’s more in-depth analysis of the borrower’s income, expenses, assets, liabilities, and credit score. Generally, documentation is provided by the borrower for each of the above items so that the lender can verify the information that was provided verbally at the pre-qualification stage.

A pre-approval is not a commitment to lend, as only an underwriter can provide that. However, a pre-approval letter lets the seller know that the information provided to the lender has been verified and it appears that the borrower will be approved for the loan.

“Once you become serious about purchasing a home, you should consider getting pre-approved for a mortgage so that you know how much home you can afford,” said Kilty. “It is important to remember that neither a pre-approval letter nor a pre-qualification letter guarantees you will be approved for your mortgage. However, by applying for a pre-approval, you are one step closer.”

Kilty works with potential home buyers on making their home-owning dreams a reality.

“When you are ready to purchase a home, I would love to meet with you to go over your finances and credit report and begin your pre-approval,” said Kilty.

To learn more, visit

We welcome your stories! Contact us at [email protected]!

News Desk
Author: News Desk

This piece was posted by our news team! Contact us or submit stories at [email protected].