What’s the Difference Between Pre-Qualified vs. Pre-Approved?

By Justin Croft

Justin Croft has a passion for buying and selling residential real estate that is contagious. He is a skilled negotiator and problem solver who thrives on going above and beyond for his clients.

I was out-showing homes recently when a longtime client mentioned they were “pre-qualified.” I asked if they were actually pre-approved. They paused and said, “What’s the difference?” That one question could save someone from losing their dream home, and it’s a conversation I have with buyers all the time. Many people think pre-qualification means they’re ready to buy, but that’s not the case. If you’re relying on a pre-qualification letter, your loan hasn’t been reviewed by the people who make the final decision.

The risk of relying on prequalification. Pre-qualification typically means a lender has pulled your credit report and requested your income information. They might plug those numbers into the software and tell you everything looks good. What they don’t always say is that none of it has gone through underwriting. That’s the step where your loan is actually reviewed and approved. Here’s where things can go wrong. You find a house, get your offer accepted, pack up your old place, and then your loan gets declined during underwriting. It happens more often than people think, and it’s a stressful, avoidable setback.

Why pre-approval matters more. Getting pre-approved means the lender collects actual documents—such as pay stubs, W-2s, and bank statements—and submits your complete file to underwriting ahead of time. The underwriter reviews your file and confirms that you qualify for a loan amount up to a specific limit, provided the home meets standard requirements. This gives you the confidence to move forward, knowing your financing is solid. It also helps your offer stand out, especially in competitive markets.

What I recommend for every buyer. Work with a lender who is willing to take the extra step and get you fully pre-approved. It puts you in a stronger position, helps avoid delays, and gives you peace of mind from day one. If your lender only provided a pre-qualification, it may be time to reassess before moving forward.

If you’re unsure where you stand or need help finding a lender who will accurately pre-approve you, reach out today. You can call or text me at 214-213-7200, email justin@croftrealestategroup.com, or visit www.croftrealestategroup.com. Let’s make sure you’re in the best position to buy with confidence.