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  • Writer's pictureQuinn Cooke

Prequalified vs Preapproved: What's the difference?

This week we welcome our business partner, Quinn Cooke of Movement Mortgage.

Most potential real estate buyers have heard that they need to pre-qualify or be pre-approved for a mortgage before making an offer on a property. Some people use the terms interchangeably but there are some key differences. Mortgage Pre-qualification is an informal estimate of how much a buyer can afford to borrow for a mortgage based on stated information on a loan application plus a credit report. Minimal income documentation is provided to the lender, therefore a pre-qualification does not provide an in-depth analysis of a buyer's ability to purchase a home. This is just the first step in the home-buying process and gives you an idea of how large of a loan you will likely qualify for. Mortgage Pre-appoval is much more in-depth. A buyer must complete an official mortgage application and submits supporting income and asset documentation such as paystubs, W2s, tax returns, and bank statements. The lender will issue a conditional commitment in writing for an exact loan amount. It's important to note that being pre-approved does not guarantee that you'll close a loan. Once you find a home and make an offer on it, the home will still need to be inspected and appraised before you can officially close the loan.

Every lender handles mortgage pre-qualifications and pre-approvals differently and the steps involved may be different from lender to lender. In my opinion, you are in a much stronger position when you make an offer on a home when you have a mortgage pre-approval. A common cause of loans “blowing up” before closing is loan officers sending pre-qualification letters without gathering income documentation to support the income on the loan application. With a pre-approval, the buyer's financials have been thoroughly vetted which limits loan approval issues and delays in the loan process.

Quinn Cooke is a Loan Officer with Movement Mortgage (NMLS 1766484, State License #FL-LO55482, GA-63564). You can contact him at or by phone at (850) 508-5629.

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