Pre-qualification, pre-approval, fully underwritten pre-approval: What are the differences?

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Pre-qualification, pre-approval, fully underwritten pre-approval: What are the differences?

Are all of them necessary or just some? While aspects of pre-qualifications and pre-approvals are similar, there are some key differences.


This is just an estimate to get an idea of what mortgage you can probably afford. A mortgage pre-qualification is generally quick to get, because the information you would need to provide is not extensive. Getting a mortgage pre-qualification is a great first step once you have decided to buy a home, and it sets you apart from other home buyers.


A mortgage pre-approval is an additional step up from a standard pre-qualification. This is when your lender looks through your income, credit score, assets, and debts to give you a more exact idea of a mortgage that fits into your budget. This process is not necessarily as quick as the mortgage pre-qualification because more documents have to be provided, but if you have all of them ready when you visit your lender, the process will go faster. Since mortgage pre-approvals are not as easy to get as pre-qualifications, you will stand out more to a home seller by already having a pre-approval rather than just a pre-qualification.

Fully Underwritten Pre-Approval

A fully underwritten pre-approval is an even greater step up from the previous two. Similarly to the standard pre-approval letter, the lender will thoroughly investigate your initial application documentation and will additionally submit it all to an underwriter for review. Once all has been verified, you will receive a fully underwritten pre-approval letter, proving the lender has approved your exact loan amount. Some lenders will not complete this until you have a contract on a property. 

For more tips on buying a home, check out our additional resources for home buyers.

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