What's the difference between mortgage prequalification and pre-approval?

Take the right step at the right time.

Prequalification and pre-approval can boost your confidence and make house hunting easier - but it's important to understand when to do which.

Mortgage Prequalification: A Smart Place to Start

Mortgage prequalification is an assessment of whether your debt-to-income ratio fits U.S. Bank guidelines for home loans. It also provides an estimate of how much you may be able to borrow - a good first step in your house-hunting journey.

While this number is informative, keep in mind how much you may qualify to borrow is often more than how much you can afford to spend on your new home and still have money left over for the other important things in your life… like furniture for your new home.

Getting prequalified doesn't require a commitment from you or the bank. It isn't a true application and your credit history doesn't factor into your prequalification. Even so, you should be aware that when you apply for a mortgage, your credit score will affect your ability to qualify. If you have concerns about your credit history, talk to your mortgage loan originator now to find out what options might be available to you.

When you get prequalified, you can request a letter stating how much you may be able to borrow, based on the information you provided to the bank. You can give this letter to your real estate agent to show you're a serious homebuyer.

You can prequalify online or by talking to a mortgage loan originator.

Get Prequalified

Mortgage Pre-Approval: Making It Official

Mortgage pre-approval involves the same steps as a mortgage application - you'll provide detailed information about your income and assets that will be reviewed by the lender's underwriters. If approved, you'll get a commitment by the lender for a specific loan amount. (When you apply for a mortgage, you're applying for credit to purchase a specific property as well.)

Pre-approval shows you have the resources to make the purchase and it helps you act quickly when you find the perfect home. From the sellers' point of view, a pre-approved buyer is more attractive than someone who says they can buy a house but have nothing but their word to back up their offer. By proving you have your bank's backing, a mortgage pre-approval can help you negotiate on price - and it can be a deciding factor for sellers who receive multiple bids.

One note on timing: Don't apply for a pre-approval until you're fairly certain you'll want to buy a home within the next 90 days. Unlike getting prequalified, a pre-approval involves requesting a copy of your credit history and an examination of your application information and the documents you provide. A pre-approval will show as an inquiry on your credit report, and it's only good for a certain amount of time.

If you decide to proceed with the loan, you may also be required to pay an application fee and prepay for the home appraisal and other costs. An estimate of costs or fees to be paid at the mortgage closing will also be determined at this stage.

To get pre-approved, you'll need to provide some personal information and financial documents, including detailed proof of your income for the past two years. You can start your mortgage application by contacting a mortgage loan originator today.

Get Started


Meet in Person
Call 877.303.1637 Call 877.303.1637
Request a Call

Find out how much you may be able to spend on your next home.

Prequalify

Equal Housing Lender