Mortgage pre-qualification vs. pre-approval: What's the difference? - Business Insider

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Turns out that pre-qualification and pre-approval are different

It also helped gave me peace of mind that I can afford the home I'm envisioning for myself. I have a budget in mind, and after getting pre-qualified, I know the figures I've been thinking are on track with what I'll likely be approved to borrow. Getting a pre-qualification gave me the number I needed, without having a hard credit inquiry show up on my credit report.

In my stage of the process, it wouldn't be — I don't want even a small dent on my credit score more than once, especially since I know I won't use the pre-approval before it expires. While this will be right for me in the future, it's not what I need now.In my search to get pre-qualified, I realized many banks and lenders use this term interchangeably.

The second reason is simpler: It's about marketing. "They're used interchangeably because it's difficult to explain the difference. Maybe even loan officers don't necessarily know what that term is. It's largely a marketing tactic," Taylor says.

 

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