Pre-qualification and pre-approval: What's the difference?

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Video transcript

Pre-qualification is simple.

Some lenders start with an application, some with a conversation. Your credit report may be pulled. Then you and your loan officer talk money. Debt. Income. Assets. Next comes an estimate for a mortgage you may qualify for. Just like that. In and out.

Pre-approval digs deeper.

The bank takes a closer look at your financials. You supply documents such as tax returns, W-2s, pay stubs and account statements, and authorize a credit check. The bank reviews everything except a property appraisal.

When you’re done, you’re pre-approved for a mortgage—at an amount that’s right for you.

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