What is the difference between a pre-qualification and a pre-approval when shopping for a home loan?

Obtaining a pre-approval is like shopping with money in your pocket! Save time and avoid unnecessary stress be speaking with a home loan specialist BEFORE you start looking at houses. When it comes to house-hunting, there’s absolutely nothing worse than falling in love with a home you don’t qualify for.


There’s a significant difference between the two. A pre-qualification is issued when you provide estimates (or close guesses) about your income, your savings, and your debt when applying for a home loan. A loan officer will use your estimates and calculate an amount you might qualify for. A pre-qualification may be issued after an informal loan application is taken over the phone, online or in person.

A mortgage pre-approval indicates that your credit, income, debt, and assets have been verified and accepted. Once you are pre-approved, your loan officer will issue a formal pre-approval letter. When we submit an offer on a home, we will be sure to include a copy of your pre-approval letter.

Does a Seller and/or Listing Agent take a pre-qualification letter seriously when making an offer on a home? Nope. If a potential home buyer makes an offer on a home with only a pre-qualification letter, the listing agent and/or seller will know that the buyer’s income, assets, and/or debt are not verified. In today’s market, where multiple offers are common, a pre-qualification letter is pretty useless.

How can I get a pre-approval letter? When submitting a loan application, provide your loan officer with documentation to help him/her verify your income, debt, and assets. Your mortgage application will include a credit check. If you meet the criteria needed for a home loan, your loan officer will issue a pre-approval letter.

Documentation checklist

  • Most recent pay stubs (for the past 30 days)
  • Most recent tax returns with W-2’s (for the past 2 years)
  • Most recent bank statements (for past 60 days)
  • Most Recent 401-K statement
  • Copy of Divorce Decree (if applicable)
  • Copy of Bankruptcy papers (if applicable)
  • History of where you have lived (within the past 2 years)
  • History of where you have employment (within the past 2 years)

** If you’re working with Val Aranda, CLICK HERE for a list of preferred lenders. **

If you apply with more than one lender (which is highly recommended), be sure to do it within the same 30-DAY time frame to avoid multiple hits to your credit score. 
~Agent Val

Texas law requires all real estate license holders to provide the Information About Brokerage Services to all prospective clients. TREC’s Consumer Protection Notice.


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