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Pre-Qualified vs Pre-Approved

What’s the Difference?

There is plenty of real estate terms used in transactions. Needless-to-say it can be confusing
for both buyers and sellers trying to navigate the process. The home loan process might feel
overwhelming and difficult to understand. Both buyers and sellers find terms like “PreQualification” and “Pre-Approval” used interchangeably, it’s no wonder they find themselves
wondering how to proceed.

Pre-Qualification
The first step in obtaining a home loan is to meet with a lender and discussing their financial
situation. The lender will discuss income, job stability, debt and credit. Once they have
performed a basic review of the qualifications and run credit, they will issue a Pre-Qualification
Letter to the potential buyer. This letter will identify the maximum sales price, down payment
requirement and basic terms of the loan, such as interest rate.
The Pre-Qualification letter is used to provide evidence that the buyer has been reviewed by a
lender who is vouching for their ability to obtain a loan.

Pre-Approval

A Pre-Approval is quite different. In this case, the lender collects all the necessary information
and proof of eligibility and has it reviewed by the lender underwriter for approval. A PreApproval letter is almost like shopping with cash, the only remaining piece of the puzzle is the
property they are buying.

We have great Lender resources to help you get started on your home buying plan.  Just reach out and let us know how we can help you.

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It was a great experience working with Kyle Bender and his team. I interviewed a couple of agents before him, but needless to say he was the last. Once I spoke with Kyle I could easily tell he was a genuine person. That was really important to me for choosing an agent to sell my home. He is an expert in his field as he had my house under contract before it even hit MLS. Even though I had extremely particular buyer, Kyle was there for every step of the way. From negotiations to referrals, he was …
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