If you’re gearing up to buy a home, you might be confused by some of the financial terminology you encounter. Like pre-qualification and pre-approval. What exactly are they? And what’s the difference between them? At Eave, we believe the home buying process should be simple and transparent. That’s why we’re laying it all out for you.

How Pre-Qualifications and Pre-Approvals are Similar

Pre-qualification and pre-approval are often the first steps in the home buying process, and they have a few things in common. They can both act as documentation for you to take to home sellers to show that you’re likely to be approved for a mortgage. They both estimate the size of the home loan you can expect to get. And they both help you make a more competitive offer than you could without any lender documentation. In fact, many sellers require either a pre-qualification or pre-approval letter before they will even consider your offer.

Before jumping into the differences between pre-qualifications and pre-approvals, it’s important to understand that neither guarantees you a mortgage or an accepted offer. Think of them as a first step to getting into the home of your dreams.


Getting a pre-qualification is often the first thing you do when you’re ready to secure home financing. Typically, to get a pre-qualification, you simply provide your lender with an estimated overview of your financial picture. That includes your income, assets, debts, and credit score. Filling out the pre-qualification form should take just a few minutes. Most lenders have them readily available online. The catch with the pre-qualification is that your information is not checked or vetted. You don’t need to provide any documentation; you simply fill out a form online, by phone or in person. And viola, within minutes, you have a pre-qualification.

While a pre-qualification can certainly help you make a stronger offer on a house, it’s important to understand that having one is never a guarantee that your mortgage loan will be approved. There are many reasons for this. But the biggest reason is that your lender has not yet fully checked out your financials. Without you supplying the proper documentation, the lender is going on your word alone. They can’t see your full financial picture from the few numbers you’ve provided on their form. For example, say you obtain your credit score from a credit estimator site. Then you actually apply for the mortgage and learn that your official credit score is lower than you realized. This could disqualify you for the loan you were seeking.


A pre-approval is a step up from a pre-qualification. A pre-qualification is more of an estimate, while a pre-approval is generally a true conditional loan approval issued after your income and assets have been fully underwritten. To obtain a pre-approval, you must fill out a mortgage application and give your lender full documentation of your financials. The lender will verify your financials and run a credit check. Once they’ve checked you out, your lender can give you a conditional approval stating the size of the mortgage you’ve been pre-approved for. They can also give you a much better idea of the rate you’ll be paying.

While a pre-approval can give you more confidence in the home buying process, it’s always important to keep in mind that it still doesn’t guarantee you a mortgage. It’s merely an important step in the process, and one that can give you an advantage, especially in a competitive market. Sellers are always looking to select the strongest offer possible. No seller wants to go through the frustration of accepting an offer, and then having the deal fall through because the buyer couldn’t secure proper financing. This is why so many home sellers favor cash: it’s a sure thing. Say a home seller is assessing three offers. Two of the offers are from buyers with pre-qualification letters, and one buyer has gone through the pre-approval process. There’s a good chance the seller will choose the pre-approved buyer, because they’ve already had their financials assessed. This takes an unknown out of the equation and gives the seller more certainty in closing the deal.

At Eave, we believe in giving home buyers every advantage possible. Visit our website to learn more about out how our revolutionary pre-approval process can help you make a cash-like offer and give you a boost over the competition.