The Difference Between Pre-Qualified and Pre-Approved

If you’re preparing to purchase a home, you’ve likely heard the two terms: pre-qualified and pre-approved. Today we’re going to help home buyers understand the difference between each.

Pre-Qualified vs. Pre-Approved: What’s the Difference?

Purchasing a home doesn’t come without a few basic terms that you might not fully understand. Being pre-qualified and pre-approved are something that you will hear when preparing to apply for a home loan.

But it’s important to know these two terms to understand where you stand in the process and what’s next. Today we’re going to explain the difference between being pre-qualified and pre-approved.


When seeking out a home mortgage loan, the first thing that the lender will do is perform a pre-qualification. A pre-qualification means a lender has done a basic review of your creditworthiness to determine your likelihood of being approved for a loan.

As a prospective buyer, you can initiate a pre-qualification by submitting a pre-qualification application to see where you stand.

It’s important to note that the requirements for a pre-qualification vary depending on the situation. For instance, pre-qualifications commonly require you to submit basic information such as your annual income, monthly housing payments, and savings.

However, some lenders will check your credit by pulling a soft credit inquiry, which does not hurt your credit score. Be sure that the lender specifies whether they are making a soft or hard inquiry before proceeding forward to ensure your score won’t be affected.


Getting pre-approved is a step above a pre-qualification. A pre-approval is as close as you can get to confirm your creditworthiness. A mortgage pre-approval allows the lender to determine how much loan money you qualify for.

This is because a pre-approval requires you to apply for a complete application with supporting documentation and a hard credit pull to take a deeper look at your credit report and score to determine whether you’re eligible for a loan.

If you’re approved, the lender will give you an offer in writing to provide you with a loan with a specific interest rate.

Having a pre-approval letter is beneficial for buyers as they’re looking for homes. A pre-approval letter helps validate your finances, shows sellers you’re a serious buyer and gives you a competitive advantage if you’re in a bidding war.

It’s important to note that your pre-approval letter does have an expiration date. This date will vary depending on the lender you choose. If your pre-approval letter expires before you find a home, you will need to start the process over again. However, a pre-approval letter typically lasts 90 days.

Purchasing a home involves a lot of important steps. If you’re preparing to find your dream home, educating yourself is the first step to a smooth process. A pre-qualification is your first insight into your loan options. A pre-approval brings you one step closer to your home and determines your overall creditworthiness and ability to pay a home loan.

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Cape Coral Mortgage has been in Florida for 20 years with over 100 years of combined experience in the mortgage industry. Our team has vast experience in all phases of mortgage lending.

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