Mortgage Pre-Qualification vs. Pre-Approval – Know the difference!

Prequalified vs. preapproved

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Although they sound interchangeable, a pre-qualification and a pre-approval for a loan are two very, very different processes.  Not understanding the difference can often lead to missed opportunities when you are buying a home.


A pre-qualification is an initial evaluation of a borrower’s potential credit worthiness and ability to repay a potential loan. Key words here – ‘initial evaluation.’  A pre-qualification is a first look and first impression based on information that has been provided to the lender for consideration. For any pre-qualification, you will need to provide gross income for the potential borrower(s) as well as current debts which will include credit cards, car payments, student loans etc.  A “Pre-Qual” Letter does not mean you have been approved for the loan.


A pre-approval is a much more valid way to estimate what you can afford to spend on a home as it requires a much deeper dive into finances. You will typically have to fill out an application either online or with your bank representative who will then pull your credit report and access your credit files. It’s a bit more work upfront BUT it makes for a much easier mortgage process because so much has already been done before you decide on your dream home.

For most pre-approval processes, you will need:

  • Proof of income – 4 weeks of paystubs (if you are paid biweekly you will need 2 paystubs) and 2 year’s W2’s. If you were a college grad in the past 2 years that counts as employment, make sure you have your official transcripts. If you have any other forms of residual income bring that documentation as well. Don’t forget the past 2 years tax returns!
  • Proof of assets – such as bank, investment and/or retirement statements.
  • Credit Assessment – Your credit score is a compilation of any debts that you have, have paid and are currently paying on. Your score is based on the amount of available credit you have, how many accounts you have and if the payments are made on time. The credit report will be pulled after your fill out the application.  It will show as a hard inquiry!
  • Personal documentation – Driver’s license, photo ID, passport etc.

If you are simply considering buying a home, and just want a guestimate of what you can afford, the pre-qualification is just fine!  But if you are seriously shopping and ready to sign the dotted line, go for the pre-approval.

The more prepared you are going into a pre-qualification or pre-approval meeting the better, your lender and your real estate agent will thank you!








Jennifer Ives-Groebl
Vice President, Senior Mortgage Lender
NMLS MLO ID: 532621

Author: Jennifer Ives-Groebl

Jennifer has been with Litchfield Bancorp since 1994 and was promoted to Assistant Vice President and Senior Mortgage Originator shortly after graduating the Connecticut School of Finance & Management in 1998. Stationed in both our Torrington and Litchfield locations, Jennifer is well known and respected in the local residential real estate community and recognized as a resource for some of the more difficult transactions. Jennifer resides in Torrington and is actively involved in the local community. She is a long time member of the Torrington/Winsted Rotary club and is currently serving as its Assistant Treasurer. Jennifer is involved with Litchfield County Board of Realtors and serves as chair of the Audit Committee and a member of the Public Relations Committee. She is also a member of the Fuessenich Park Partnership; and through Education Connection, has participated in the Mentoring Program.