Why is a mortgage Pre-approval so important?  And just what is the difference between a mortgage Pre-Qualification and a mortgage Pre-Approval?


To get pre-qualified, a lender evaluates your debt, income and assets to give you a loan estimate for how much you’re likely to be approved. This quick procedure can guide your search and help you explore your mortgage options, but it doesn’t include an analysis of your credit report or an in-depth look at your ability to purchase a home.

Drawbacks of a pre-qualification:

A pre-qualification doesn’t carry the same weight when making an offer as does a pre-approval. Your pre-qualified amount can help you determine your price range, but it’s not a sure thing.  It’s simply the amount for which you might expect to be approved. A listing agent, and a home seller, will most likely request a pre-approval along with your offer.  You don’t want to lose the opportunity to buy a home because you have to wait for a pre-approval to be done.


Once you’ve looked into a pre-qualification and started to poke around the internet looking for your dream home, it’s time to get serious and specific with pre-approval. You’ll complete an official mortgage application and supply your lender with the necessary documentation to perform an extensive check on your financial background and current credit rating. At this stage, you will most likely not have found a home yet, but you can leave blank any references to “property” on your application.

The basic formula of pre-approval remains the same from lender to lender. A lender reviews your credit report and financial information to determine your approved loan amount. Once the process is complete, your lender can disclose your specific mortgage amount. This can help you pin down your interest rate, and in some cases, you might even be able to lock in a specific rate! 

Benefits of a pre-approval: 

A pre-approval helps you narrow down your search with an accurate price range.  Real estate agents and sellers know you’re ready to buy, and you can make an offer on the spot when you find your dream home.

Final Approval

Keep in mind that you will still need a final approval to close on your home.  Your lender will require some additional information, an appraisal to be done on the property, and a final verification of your employment and income.   These last items are done by an underwriter.  Once all the underwriter’s requests are approved, you will have your final mortgage approval and will be able to close on your new home!  

Let us know if you're ready to start looking for a new home.  We will be more than happy to provide you with contact information for several lenders we routinely work with and trust will get you into your new home.