No, they are not the same thing. But if you thought they were, you’re not alone. Too many people have no idea of what the distinctions are between the two, and it can make a major difference when making an offer on a home. So if you’re looking to buy a home, pay attention to the following:


Getting pre-qualified is the first step in the starting the mortgage process, and it’s usually pretty easy. You give the mortgage lender a brief summation of your overall financial condition, including your debt, income and assets. After taking this information into consideration, a lender can give you a general idea of the mortgage amount for which you qualify. This process can be done over the phone or online, and it usually doesn’t cost anything (it shouldn’t). Getting a pre-qualification does not include a look into your credit report or give a real look into your ability to purchase a home. The best thing about this is it basically sets a limit to the highest sales price you can begin to shop for in a home.

The initial pre-qualification step lets you talk to the lender about any goals or needs you may have regarding your mortgage. During this step, a lender can explain your different mortgage options and recommend the one best suited for you. Because it’s a quick process, and based only on the information you give to the lender, the pre-qualified amount is not a sure thing; it’s just the amount for which you might expect to be approved pending further documentation. For this reason, being a pre-qualified buyer isn’t as strong as being a pre-approved buyer who has been more thoroughly vetted. 


Getting pre-approved is the next step, and it is a much more one. You’ll complete an official mortgage application (usually done online), then give the lender the required documentation to do a thorough check on your financial history and credit scores. From the investigation, the lender can provide you the specific mortgage amount for which you are approved. You’ll also have a pretty good idea of the interest rate you will be able to receive, but it won’t be locked in until you go under contract to purchase a home.

With the pre-approval, you’ll get a conditional commitment in writing for an exact loan amount, letting you look for a home at or below that price maximum. This puts you at an advantage when dealing with a seller, as they will know you’re that much closer to getting a mortgage. 

The major benefit in getting PreApproved is you’ll know well in advance how much you can afford before you make an offer. This helps so you don’t waste time with guessing or looking at properties that you cannot afford. Getting pre-approved for a mortgage also enables you to close on the home faster, which can be an advantage when sellers need to move fast. In a sellers market, having this extra step completed lets the seller know that your offer is much stronger than ones who haven’t completed this step, and could prevent you from losing the home to another potential buyer who already has financing arranged.

Bottom Line

Be warned. Pre-approved and pre-qualified are not the same thing. Don’t assume that the bank will commit to your loan until you have the former.

Pre-Approved is always the way to go. It makes your offer a lot stronger in the eyes of the sellers, reduces the amount of paperwork you’ll need after your offer is accepted, and gives you a much more concrete price maximum you can shop.

So if you’re in the market to buy a home, Contact Me Today! I can help you get set up with mortgage and insurance people to make sure you’re able to buy a home and have the best coverage.

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You can also get a copy of my Home Buyers Handbook when buying to learn about the process!