Mortgage Prequalification vs. Preapproval: What’s the Difference?
1. Prequalification: A Quick Estimate
- What it is: A basic evaluation of your financial situation, usually based on self-reported information (like income, debts, and assets).
- How it's done: Typically online or over the phone, most often without pulling your credit report.
- What you get: An estimate of how much you might be able to borrow and an estimated monthly payment.
- Use case: Great for early-stage planning or getting a general idea of your budget.
Pro - Fast, easy, and doesn’t affect your credit score.
Con - Not a guarantee — it’s just a best estimate.
I just want to prequalify for now
*This will just securely submit your information to your Loan Officer, upon which they will send a prequalification letter back to you, usually within 24 hours.
2. Preapproval: A Verified Offer
- What it is: A formal review of your finances, including credit check, income verification (like pay stubs and tax returns), and debt-to-income analysis.
- How it's done: Involves submitting documents and consenting to a hard credit inquiry.
- What you get: A preapproval letter from a lender stating how much you’re qualified to borrow, based on verified data.
- Use case: Essential when you're ready to make offers — sellers take you more seriously.
I'm ready to go
*Once all docs are gathered and submitted, this will still not pull your credit but will authorize us to pull it when you give us the go ahead. When the completed application and credit report are submitted to underwriting, the preapproval may take a few days to be issued.