What’s the difference between a Pre Qualification and a Pre Approval

Two often confused terms in the home buying process are a loan pre-qualification and a loan pre-approval. See Video.



  • Simply an estimate of how much house you can afford.
  • The best time to get a pre-qualification is right at the beginning of your home buying process, before you even start looking at houses.
  • This involves talking with a lender and providing information on your income, assets, debts, and a potential down payment amount.
  • The lender would then provide you with an amount in writing of how much he thinks you could afford to pay for a monthly mortgage.
  • There is no cost involved and there is no commitment on either side.
  • This estimate is just helpful for you to figure out if buying a home is a viable option and what your price range would probably be.



  • Getting pre-approved means that you have a tentative commitment from a specific lender for mortgage funding.
  • You provide a lender with actual documentation of your income, assets, and debts.
  • This process may require an application fee, since the bank will run a credit check and work to verify all your employment and financial information.
  • Once you are approved, the lender will give you a letter of commitment, stating how much money the bank is willing to loan you for a home purchase.
  • With a pre-approval in hand you can start your shopping - real estate agents and sellers will take you much more seriously when they see you have your mortgage funding in place.
  • It is important to understand that even a pre-approval is not a guarantee that you will be approved for a mortgage loan. 
  • The funding will only be given when the property appraisal, title search, and other verifications check out on the home you have chosen to buy. 
  • The pre-approval is not binding; you can still obtain a mortgage from a different lender.
  • If you do stick with the same company that pre-approved you, the application process will be much shorter once you find the right house.

Patricia Grauke/Realtor

GRI, Certified HAFA Specialist, SFR
Cal BRE# 01775108

1801 W. Avenue K
Lancaster, CA 93534
Cell:  661-965-9457
Fax:  661-945-9133
PattyGrauke@hotmail.com, www.pattysrealestate.com