Pre-Qualification and Pre-Approval Basics

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Pre-Qualification and Pre-Approval Basics

There are several steps to any mortgage loan process, and Mortgage Ogden, our brokers are here to help you navigate them. One area that first-time homebuyers can occasionally become confused on? The difference between pre-qualification and pre-approval.

These are not the same things, and one of the first mistakes some people make is confusing the two and assuming they’ve been approved when, in reality, they haven’t. Here are the basics on each term, and why you need to understand and comply with both.


The initial step in nearly any mortgage process is getting pre-qualified, and it’s very simple in most cases. You supply a lender with the basics of your finances – debt, income and assets. This can be done over the phone or via the internet, and there’s usually no cost. Pre-qualification does not include a credit report, or any in-depth looks at your purchasing ability.

This step also allows you to discuss any goals or needs you may have with your lender. The lender can explain various mortgage options, and make recommendations. Know that pre-qualification is not a sure thing – it’s just a rough amount for which you can expect to be approved.


The next step is pre-approval, and it’s more thorough. You’ll complete an official application and often pay an application fee, plus provide more extensive information for credit and background checks. Through pre-approval, you’ll receive a conditional commitment in writing for an exact loan amount, which allows you to begin shopping for homes in that price range. The advantage of this step is that once you find a home, you can move quickly – making an offer won’t be contingent upon you securing financing.

Loan Commitment

The final step after pre-qualification and pre-approval will be a loan commitment, which will be issued by a lender when it has approved each of the home, the borrower and the house in question. Your income and credit will be checked again, just to ensure nothing major has changed since the initial approval. The bank may require bits of additional information if the home appraiser brings up any issues to investigate.

Want to learn more about the steps in the loan process, or interested in any of our mortgage services? Speak to the brokers at Mortgage Ogden today.