In a hot real estate market, a Realtor working on your behalf will give you a head start. What also helps if you are not paying cash is getting pre-qualified for a mortgage loan.

Getting pre-qualified or pre-approved for a mortgage loan gives you more concrete information about what you can and cannot afford. There’s nothing more disappointing than falling in love with a property only to find out you cannot afford it. Getting pre-qualified also allows you to move quickly when you find that perfect property, putting you ahead of other buyers who have not gone through the process. In addition, some Sellers insist upon seeing a pre-qualification letter before considering your offer.

There are two terms that are often used interchangeably, “Pre-Qualification” and “Pre-Approval”. However, they are quite different! Read on.


Getting pre-qualified for a loan is a very easy process. It’s an initial evaluation of your creditworthiness. You provide the lender your approximate income, the amount of debt you’re carrying, and any other important details from your credit history. The lender uses these figures, which have yet to be verified, to calculate how much money you might be eligible to borrow. The lender may provide you with a pre-qualification letter, which has more details about your likelihood of obtaining a loan.

However, all information you provide during pre-qualification is subject to verification by the lender when you submit your actual loan application. There is no guarantee of a mortgage loan, as your financial situation has not been verified.


Pre-approval means that your financial situation has been verified by the lender. It’s more involved than pre-qualification but still relatively simple.

You will have to fill out a mortgage loan application and provide the necessary supporting documentation. The lender will examine your financial situation—your credit report, your employment history, your income—and decide what interest rate to offer and the maximum amount you would be permitted to borrow.

Although pre-approval provides more certainty to a borrower than pre-qualification, it also does not guarantee a mortgage loan. That involves other conditions, such as an assessment of the property you want to purchase or one that you’d like to renovate.

If you have any questions about this process, the various types of loans, advice about improving your ability to get one, or if you simply need a list of lenders, please call Texas Hometown Realty. We are here to help!

This content is not the product of the National Association of REALTORS®, and may not reflect NAR's viewpoint or position on these topics and NAR does not verify the accuracy of the content.