Mortgage Pre-Approval vs Pre-Qualification

When people talk about life goals, owning a home is a common milestone that people set for themselves. Home ownership is a clear sign that you’re ready to level up in your life and start to build personal wealth. Maybe you’ve already reviewed the features that you would need and want to have in your home, you may already have an idea of where you want to live, and even a rough budget that you’re comfortable with.

But how can you be sure that you are making meaningful and realistic plans for your future home? Luckily, that is why pre-approvals and pre-qualifications come into play. Though the terms may seem the same (and maybe you’ve heard them used interchangeably) they are actually different, first let’s look into each before delving into their differences. 

Do you want to get started on your journey to a new home right now? Start by applying for a pre-approval letter and strengthen your position with real estate agents and sellers! The application at Owning only takes 10 minutes (or less) to complete, and doesn’t require documents for initial pre-approval.

What is a mortgage pre-approval?

A mortgage pre-approval helps you figure out how much money you can borrow for your home loan. It also gives you a better view of your home buying power by setting a realistic budget. The good news is that Owning offers a conditional pre-approval that doesn’t require any documents. It has just a few questions about your finances and the type of home you’re looking for. That’s it.

It’s important to note that having a pre-approval does not guarantee approval for a mortgage. To get a pre-approval letter, you will need to provide some information and authorization for the lender to check into your background.

Here are a few items that you may need to provide to get a pre-approval:

  • Personal Identification
  • Pay Stubs
  • Bank Statements
  • Tax Documents
  • List of Monthly Debts
  • Credit Reports 

During a pre-approval, the lender not only wants to determine how much of a loan you could potentially be approved for but also if you’re able to make the monthly payments on the loan.

Typically, your lender will pull your credit report and look into your documents to ensure accuracy. This is why your personal information is required. It’s a good idea to have these items available for your loan officer to review. 

What is mortgage pre-qualification?

A pre-qualification or conditional pre-approval indicates that you’re working with a lender and can start shopping, but you’re not yet pre-approved for a mortgage.

This is a good step to take early in the homebuying process because it allows agents or sellers to understand that you’re working with a lender.

What is the difference between pre-approval & pre-qualification?

After a quick overview of the two terms, the differences may stand out a bit more to you.

A pre-qualification or conditional pre-approval informs sellers and agents that you’re working with a lender and will submit documents for pre-approval.

With a mortgage pre-approval you are providing documentation and information on your finances. A mortgage pre-approval carries more weight to it than a pre-qualification does with sellers and agents because it shows that you have the necessary documentation and have an idea of what you’re likely to get approved for.

Having a pre-approval letter shows real estate agents and sellers that you’re ready to buy. Also, the lender will do review of your details to make a determination on your buying power.

How can I get a mortgage pre-approval letter?

Getting a pre-approval letter is a good step in the home buying process, you would want to have all of your needed documents on hand to provide to your lender. You would also want to research your lender to determine if their rates and requirements fit into your goals. If you want a lender that focuses on your needs, is digitally friendly, and has affordable rates, start your journey by getting pre-approved today!


Applicant subject to credit and underwriting approval. Not all applicants will be approved for financing. Receipt of application does not represent an approval for financing or interest rate guarantee. Restrictions may apply.