Prequalification vs. Preapproval
What's the difference—and why does it matter? When you're ready to make an offer on a home, prequalification and preapproval are not the same thing.
Prequalification
A prequalification is generally an initial assessment based on information you provide about your income, assets, debts, and credit. It can help you understand approximately how much you may be able to borrow.
Preapproval
A preapproval typically involves a more thorough review of your financial information and supporting documentation. Depending on the lender and loan program, credit and income documentation may be reviewed before a preapproval is issued.
Why Does It Matter?
In a competitive Texas real estate market, sellers and listing agents may want confidence that a buyer is financially prepared to purchase.
Before submitting an offer, understand what your lender has reviewed and what your preapproval represents. A strong mortgage plan can help you shop with greater confidence.
This information is provided for general educational purposes only and is not a commitment to lend, an offer of credit, or individualized financial advice. Loan programs, eligibility requirements, interest rates, terms, fees, mortgage insurance, and guidelines are subject to change and may vary by borrower, property, lender, and loan program. All loans are subject to applicable underwriting, credit, income, asset, and property requirements.