What is the difference between pre-qualifying and pre-approval?

Pre-qualification gives the prospective borrower an idea of the loan amount for which he or she can qualify. In order for the lender to make this calculation, the prospective borrower needs to provide the lender with information about his or her credit, assets, debts and income. Because the borrower does not provide supporting documentation and the lender does not verify the information, the pre-qualification is not accompanied by a commitment to lend. You can use our mortgage calculator to estimate pre-qualification information. Pre-approval is a step beyond pre-qualification. In order to be pre-approved, the borrower submits a full loan application to the lender with all of the required supporting documentation. The loan application is processed in the usual manner where borrower information and credit is verified, and the loan application is submitted to the lender's underwriting department for approval. If the lender issues a pre-approval, it constitutes an agreement to lend the home buyer a specified amount of money on specific terms, usually subject to a satisfactory review of the property and no change in the borrower's financial condition.