Woman sitting on couch looking at laptop while talking on phone.

Mortgage Preapprovals Vs. Prequalifications: Which Should You Get?

April 20, 2024 5-minute read

Author: Victoria Araj


As you prepare to apply for a mortgage, you’ll come across terms like “prequalification” and “preapproval.” It’s essential to understand what these terms mean – they’ll guide your home search and help you focus on homes you can afford. When the time comes, they can also help you decide how much to offer and show the seller that you’re a serious buyer.

We’ll review common ways lenders use prequalification and preapproval in this article. We’ll also explain how lenders typically handle approvals so you can know what to expect when you apply for a mortgage.

How Do Lenders Handle Mortgage Approvals?

At the most basic level, prequalification and preapproval are types of mortgage approvals, and they refer to the steps a lender takes to verify that a client can afford a mortgage. Here are a few points to remember:

  • Every lender handles mortgage approvals differently. The steps and words involved change from lender to lender. Many lenders use prequalification and preapproval interchangeably, although they’ve meant fundamentally different things traditionally.
  • Neither is a guarantee that you’ll close the loan. Prequalification or preapproval is a way for a lender to help you and a seller estimate what you can afford. After you find a house and make an offer, the home will still need to be appraised by a third party and inspected for potential repairs before you can close on the loan and buy the home.

At Rocket Mortgage®, we make the approval process as seamless as possible. You’ll quickly get feedback on your options and eligibility when you apply, and you can complete the entire process online.

What’s A Mortgage Prequalification?

Prequalification generally means that a mortgage lender collects basic financial information from you to estimate how much house you can afford. Getting confirmation from a lender that you prequalify for a home loan provides a general idea of how much you’ll be approved for when it comes time to close. Prequalification makes it easier to set a home buying budget and helps you narrow down how much you should spend on a home.

It’s common for lenders to rely on self-reported information instead of verifying your finances by pulling your credit report or reviewing financial documents. Prequalifying for a mortgage typically provides a ballpark estimate rather than a firm number, which makes it less reliable than a preapproval. A preapproval usually involves your lender checking your credit score and reviewing bank statements and other documents.

Prequalification Letters Help You Start House Hunting

As you begin searching for a home, real estate agents and sellers want to see you’ve been working with a mortgage lender so they know you can afford a home. After prequalification, you’ll usually receive a “prequalification letter” that you can show to an agent or seller as proof you’re working with a lender.

While prequalification is a good first step, it typically won’t carry as much weight as a preapproval because a lender hasn’t verified your information. Going beyond prequalification and getting preapproved by a loan officer is a critical step that shows you’re serious about buying a home.

See What You Qualify For


Type of Loan

Home Description

Property Use

Your Credit Profile

When do you plan to purchase your home?

Do you have a second mortgage?

Are you a first time homebuyer?

Your email address () will be your Username.
Contains 1 Uppercase Letter
Contains 1 Lowercase Letter
Contains 1 Number
At Least 8 Characters Long
Go Back


By submitting your contact information you agree to our Terms of Use and our Privacy Policy, which includes using arbitration to resolve claims related to the Telephone Consumer Protection Act.!

NMLS #3030
Rocket Mortgage Logo

Congratulations! Based on the information you have provided, you are eligible to continue your home loan process online with Rocket Mortgage.

If a sign-in page does not automatically pop up in a new tab, click here

Rocket Mortgage Logo

Mortgage Prequalification Vs. Preapproval: What To Expect When You Apply

Both prequalification and preapproval provide borrowers with an estimate of how much home they can afford. However, a mortgage preapproval is a more official step that requires the lender to verify your financial information and credit history. Documents required for preapproval may include pay stubs, tax returns and your Social Security card.

A preapproval is a stronger indication of what you can afford and adds more credibility to your offer than a prequalification. You’ll receive a preapproval letter to supply to sellers, demonstrating that a lender has verified your financial information and that you can afford a mortgage.

After you’re preapproved, your lender will provide a mortgage commitment letter showing how much money they’ll likely approve you to borrow. The letter can boost your credibility when making an offer on a home.

Lenders typically offer a few levels of approval designed to give you a clearer picture of what you can afford:


With prequalification, lenders pull your credit and ask questions about your income and assets to estimate what you can afford. A prequalification that involves checking your credit score can be more accurate than a standard prequalification that doesn’t include this step.

Your lender will issue a prequalification letter if you qualify for a mortgage.

Verified Approval

After you’ve been prequalified for a mortgage, you can pursue mortgage preapproval. You’ll need to speak to a home loan expert and provide documentation to verify your income and assets.

Borrowers can get a Verified Approval with Rocket Mortgage. A Verified Approval is an initial loan approval that is manually completed by an underwriter, reducing the risk of a deal on a home falling through due to financing. Verified Approval can offer buyers peace of mind and an edge over other buyers in a competitive market.

Once you get approved, your lender will issue an approval letter. You can show this to your real estate agent and sellers as proof you have enough financing to purchase a home.

Remember, both prequalifications and preapprovals are estimates that help guide your home search. After you make an offer on a house, your full mortgage approval will depend on a third-party home appraisal and passing any required inspections.

Should You Get Prequalified Or Preapproved?

Getting preapproved for a mortgage will be the best option for most serious home buyers. Ultimately, the best option for you will depend on the stage of the home buying process you’re in.

Prequalification is ideal for:

Preapproval is ideal for:

Touring available properties

Preparing to buy a home

Getting an informal estimate of what you can afford

Getting a more accurate estimate of what you can afford

Understanding your loan options

Understanding what interest rate and loan type you qualify for

Prequalification Vs. Preapproval FAQs

Here are some answers to a few frequently asked questions to help you decide between a mortgage prequalification and a mortgage preapproval.

Are prequalifications and preapprovals the same thing?

No. Prequalifications offer a rough estimate of how much mortgage you may qualify for without requiring a credit check or extensive review of your financial situation. Preapprovals give you a firmer estimate and outline the possible interest rates and loan amounts you’ll qualify for based on your credit score and finances.

Do I have to get prequalified to start looking at homes?

Getting prequalified is a great way to figure out your home buying budget, but it’s not a requirement. You should be able to look at homes without going through the prequalification process.

Do I need to be prequalified before I can be preapproved for a loan?

No. You can start with preapproval. Starting with preapproval is ideal if you know you’re ready to buy a home and want to make a qualified offer immediately.

How do I prequalify for a home loan?

Once you choose a mortgage lender, they can prequalify you for a home loan by collecting basic financial information to estimate how much house you can afford. Remember, a prequalification is a quick, informal estimate.

The Bottom Line

A mortgage prequalification is a good way to estimate how much home you can afford. A preapproval takes it one step further and verifies the financial information you submit to calculate a more accurate amount. Getting approved early in your home search is a great way to know what you can afford. It will help you narrow in on your dream house and stand out to sellers.

Ready to start your home buying journey with confidence? Take the next step and apply online with Rocket Mortgage.

Take the first step toward buying a house.

Get approved to see what you qualify for.

Victoria Araj

Victoria Araj is a Section Editor for Rocket Mortgage and held roles in mortgage banking, public relations and more in her 15+ years with the company. She holds a bachelor’s degree in journalism with an emphasis in political science from Michigan State University, and a master’s degree in public administration from the University of Michigan.