If you don’t know the difference between pre-approval vs. pre-qualification, don’t feel bad. Many loan officers and realtors don’t know the difference either. Technically there is a difference, although most of the time it’s just semantics.
What is Pre-Approval?
Your loan officer received and reviewed all income and asset documentation. A loan application was input in the system, a credit report ran, and a thorough review completed. A determination was made by your loan officer with little uncertainty as to whether you will or will not qualify for a mortgage.
What is Pre-Qualification?
You provided verbal information only regarding your income and assets. No loan application was received, and no credit report was necessarily pulled. The loan officer determined (with more or less uncertainty) whether you will or will not qualify for a mortgage.
A verbal pre-qualification is essentially worthless. Instead, work with an experienced loan officer, provide all requested documentation, and complete a true pre-approval.
It is best always to get pre-approved first. Then go shopping for a home.