Some offers on this page are from advertisers who pay us, which may affect which products we write about, but not our recommendations. See our Advertiser Disclosure. Prequalification is a rough estimate of how much you may be able to borrow, while preapproval is a vetted, conditional commitment of the amount and interest rate a lender feels comfortable offering you for a mortgage.
Prequalification is based on the information you provide, whereas a preapproval requires a soft credit pull and is a more accurate representation of what you can borrow. Preapproval vs. prequalification can vary from lender to lender in terms of definition, and it's important to understand the differences as you begin your homebuying journey. Usually a hard pull, but it varies by lender All mortgage inquiries within 45 days count as one Pay stubs, W-2s, tax returns, bank statements One to three business days, depending on the lender A rough estimate that you can use when house shopping, but not strong enough to make an offer on Based on verified documents, so it's a realistic budget you can make offers with.
Still conditional — final approval requires full underwriting, and any rate quoted isn't locked until you lock it Yes, a preapproval letter is expected with an offer While budgeting in the early stages of your home search *A soft pull doesn't affect your score and doesn't show to other lenders; a hard pull is recorded on your credit report and can move your score slightly. Mortgage prequalification is an early homebuying step that can help you estimate your potential budget. Lenders base the estimate on self-reported information you provide about household income, existing debts, savings, your credit score, and the amount you expect to put toward a down payment.
Because these figures aren't yet verified, view your prequalification letter as a helpful budgeting guide rather than a guarantee of mortgage financing. Many lenders offer prequalification at no cost, either through an online application or by speaking with a loan representative. The process can give you a useful starting point for evaluating homes and deciding what price range is realistic.
Keep in mind that you'll need to provide proof of income and other documentation before actually applying for a loan. Even so, a prequalification can give you a clearer picture of which homes you can likely afford during your search. Mortgage preapproval gives prospective homebuyers a more precise idea of how much they can borrow and at what interest rate.
The lender reviews your financial profile, including your credit history, income, debts, assets, and other supporting documentation, before issuing a conditional preapproval letter. You'll need to supply government-issued identification, recent pay stubs, federal tax returns, bank statements, and records from investment or retirement accounts. Because the lender evaluates your finances in greater detail, the estimated loan amount is generally more reliable than mortgage prequalification.
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