Prequalification vs Preapproval.

In plain English

Prequalification and preapproval both tell you a lender's likely interest before you formally apply, but they differ in how deep the check goes. Prequalification is usually quick and based on a soft inquiry or information you provide, so it does not affect your score but is only an estimate. Preapproval generally involves a more thorough review and sometimes a hard inquiry, so it carries more weight, though it is still not a guaranteed final approval. Lenders sometimes use these two terms differently, so read the offer rather than the label. Neither one is a binding contract; the lender can still decline you after verifying everything during the full application.

01Why it matters

Treating a prequalification as a done deal can leave you surprised at the final step, so knowing which one you have tells you how solid the offer really is.

02The math, step by step

You get prequalified for a $250,000 mortgage online in minutes using a soft inquiry, which is just an estimate. Later you go through preapproval, where the lender pulls your full credit, checks your pay stubs and bank statements, and issues a preapproval letter. Sellers take that letter more seriously, but the loan is still final only after the lender verifies the home and your file at closing.

03What this is NOT

04Receipts

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