What is the difference between Mortgage Pre-Qualification, Pre-Approval, and Final Loan Approval?

A pre-qualification is normally issued by a loan officer.  At first he/she interviews you then determines the dollar value of a loan that you can be approved for.  This does not necessary give you a loan commitment.  If you pre-qualify, the loan officer will issue a pre-qualification letter which indicates that you are qualified to purchase a house.  You can show this letter to the home seller when making an offer on a real estate property.


Pre-approval is a step higher than pre-qualification.  It involves verifying your credit record or history, down payment, employment history, and your assets so your Social Security Number (SSN) will be asked by the loan officer in order to verify your personal information.  Your loan application is submitted to an underwriter for approval and with conditions.  You will receive a pre-approval letter once you’re loan is pre-approved.  This letter is an advantage because it allows you to close quickly when you find a house to buy.  It can help you negotiate a better price with the seller since you are very close to having cash in the bank to pay for the house.


Final loan approval happens after property appraisal, all required documents have been submitted to the lender, and all contingencies and conditions have been met for closing.


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Cheeky Girl profile image

Cheeky Girl 7 years ago from UK and Nerujenia

Good hub! Useful information here!


dyesebel10 profile image

dyesebel10 7 years ago from USA Author

Thanx Cheeky Girl for stopping by.

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