Pre-qualified vs Pre-approved

What's the difference between getting pre-qualified and pre-approved?

Keep in mind, lenders use their own terms to describe different application and approval phases. For the sake of simplicity, we're using the terms "pre-qualification" to refer to an initial less formal phase, and "pre-approval" to refer to a phase involving documentation of financial information and a credit check.

What is mortgage pre-qualification?

Pre-qualification is an early step in the homebuying journey. When you pre-qualify for a home loan, you're getting an estimate of what you might be able to borrow based on information you provide about your finances. Pre-qualifications typically are quick processes that can easily be done online, in person, or over the phone with results coming to you within an hour.

What is mortgage pre-approval?

Pre-approval is as close as you can get to confirming your credit worthiness without having a purchase contract in place. You will complete a mortgage application and the lender will need to verify all information you provide. This will also result in a credit check. If you're pre-approved, you'll receive a pre-approval letter typically within 10 days after you've provided all requested information. The pre-approval is an offer (not a commitment) to lend you a specific amount, good for 90 days.

What information do I need?

Pre Qualification	Pre Approval
Income Information	Copies of pay stubs for most recent 30 days of income
(soft) Credit Check	Full Credit Check
Basic information about bank accounts	Bank account #s and 2 recent bank statements
Down payment amount & desired mortgage amount	Down payment amount & desired mortgage amount
	W-2 statements, Signed personal and business tax returns from past 2 years