Pre-qualification vs. pre-approval: Explaining the difference

When you hear pre-qualification and pre-approval, you may think the terms are interchangeable, but they have different meanings when it comes to the home buying process. Here’s what you need to know to make these early steps of home financing easier to understand.

Courtesy of Christian Koch
What’s a pre-qualification?

A pre-qualification is a best guess of what you can possibly afford. Because it’s often based off what you verbally tell your lender about your income, it may not always be reliable.

What’s a pre-approval?

A pre-approval is the real deal. It’s an actual estimate of how much you can afford for your home. Underwriters use documentation to verify your pre-approval, meaning it’s more reliable than a pre-qualification.

What Movement does

While most lenders issue a pre-approval without a qualified decision maker’s input, our Movement Buyer’s Advantage program puts your income and credit information directly in front of an underwriter. Within hours,* you could get an underwritten pre-approval that tells you exactly where you stand.**

You usually need the following items*** to be considered for a pre-approval:

W-2 forms
1040 federal tax returns
Pay stubs or current LES (military)
Copy of driver’s license and/or Military ID
Federal corporate and/or partnership tax returns (self-employed)
Statement of Service from Command – must include eligibility for reenlistment (military)
Award letters for retirement income, social security, disability income and SSI (if applicable)

To sum it up

While a pre-qualification may get you thinking about your options, a pre-approval will tell you just how much home you can afford. 

You don’t need a thesaurus to understand all the mortgage jargon. You just need a good loan officer to help.

Find a loan officer in your area to find out what you can afford.

* While it is Movement Mortgage’s goal to provide underwriting results within six hours of receiving an application, process loans in seven days, and close in one day, extenuating circumstances may cause delays outside of this window. ** For qualifying borrowers. *** Items may vary.


About the Author:

Adam O'Daniel

Adam O'Daniel is Movement's Communications Director. He leads corporate communication and public relations efforts across the organization. Email him at