By Gene Griffin, Branch Manager, NMLS #2234848 ·
A pre-qualification is a quick estimate based on what you tell a lender, with no credit pull. A pre-approval means an advisor has reviewed your actual documents and credit report. Sellers take a pre-approval more seriously because someone has checked the numbers.
Both terms get thrown around like they mean the same thing. They don't, and the difference shows up the moment you make an offer.
Pre-qualification
A quick estimate of what you might borrow, based on what you tell us about your income, debts and savings. It's a good first step to set a budget, and our online form doesn't pull your credit.
Pre-approval
Your advisor reviews your actual documents and credit. That means pay stubs or tax returns, bank statements and a credit report. The letter you get back carries weight because someone has checked the numbers.
Why sellers care
When a seller compares offers, a solid pre-approval tells them your financing is less likely to fall apart. In a competitive situation that can matter as much as price.
What to have ready
- Two recent pay stubs and two years of W-2s, or two years of tax returns if you're self-employed
- Two months of bank statements
- A photo ID
- Details on any other properties you own
Start with pre-qualification to get your bearings. Move to pre-approval before you start touring homes seriously.
This article is general information, not a loan offer or financial advice. Programs and guidelines change; talk with a licensed advisor about your situation.