Pre-Qualified vs. Pre-Approved: What’s the Difference?
When you’re getting ready to buy a home, one of the first steps is understanding your buying power. That usually starts with either getting pre-qualified or pre-approved.
Step 1
Check Eligibility
Step 2
Payment Option
Step 3
Get Approved
Step 4
Close the Loan
Step 5
Repayment & Loan Terms
What Does “Pre-Qualified” Mean?
Pre-qualification is an initial estimate of how much you might be able to borrow. It’s typically:
- Based on self-reported income, assets, and credit estimate
- A quick process — often done in minutes
- Not a guarantee or commitment from the lender
Think of pre-qualification as a first look at your borrowing ability — useful if you’re just starting to explore the idea of buying a home.
What Does “Pre-Approved” Mean?
Pre-approval is a more formal process. It means the lender has reviewed and verified your financial documents and pulled your credit report. As a result, you receive a conditional commitment for a loan amount.
This is the gold standard when you’re ready to make an offer on a home.
Frequently Asked Questions (FAQs)
Do I need a credit check to get pre-qualified?
Not always. Many pre-qualifications are done without pulling your credit. However, Crestico can offer a soft pull option that won’t affect your score.
How long does a pre-approval take?
With Crestico, you can typically get pre-approved in 24–48 hours, once we receive your documents.
Will pre-approval hurt my credit score?
Pre-approval includes a hard credit inquiry, which may cause a small, temporary dip in your score (usually less than 5 points).
How long is a pre-approval valid?
A pre-approval letter is generally valid for 60 to 90 days, depending on the lender. We can renew or update it easily if needed.
Can I get pre-approved with bad credit or no W-2 job?
Yes! Crestico works with borrowers of all types, including:
- Self-employed
- 1099 earners
- Bank statement loans
- Lower credit scores (580+ for some programs)