Short answerA prequalification is a quick estimate based on what you tell a lender. A preapproval means the lender has pulled credit and reviewed documents such as pay stubs, tax returns, and bank statements. Sellers take a preapproval more seriously. Neither is a final loan approval, which comes after the appraisal and underwriting.
Side by side
| Prequalification | Preapproval | |
|---|---|---|
| Credit pulled | Sometimes | Yes |
| Documents reviewed | No | Yes |
| Weight with sellers | Low | Higher |
| Time | Minutes | A day or a few days |
What lenders usually ask for
- Two years of income history: pay stubs, W2s or tax returns.
- Two months of bank statements.
- ID and permission to pull credit.
- Details on debts and any gift funds.
Shop lenders
Comparing loan estimates from more than one lender within a short window can save money. Ask each for a written Loan Estimate.
Loan rules change and depend on your file. Your lender has the final word.
Frequently asked questions
Does a preapproval hurt my credit?
A credit check can lower a score slightly. Several mortgage checks within a short window are usually treated as one.
How long is a preapproval good for?
Often 60 to 90 days. Ask your lender.
Keep reading
Looking at a house and not sure what you are getting into?
Ask for a free Before You Offer review. Send me the listing. I look over the photos, the seller's disclosure, and recent sales, then flag likely condition issues and planning cost ranges before you write an offer.
Request a Before You Offer reviewOr call or text (812) 525-5489, or email [email protected].
The Before You Offer review is a REALTOR® and contractor review of the listing, not a home inspection. It is for buyers who are not already working with an agent. If you have an agent, please bring these questions to your agent.
Sources
Written by John Long, REALTOR®, 1 Percent Lists Indiana Real Estate. Working contractor who has priced hundreds of home inspection repair requests. Former labor relations negotiator for a major manufacturer and U.S. Coast Guard veteran.
John Long, REALTOR® · 1 Percent Lists Indiana Real Estate · (812) 525-5489 · yourpropertynegotiator.com
This page is general information, not a substitute for a professional home inspection, and not legal, tax, insurance, or lending advice. Ask a real estate attorney about contracts and disclosure, a CPA about taxes, your lender about loan rules, and a licensed inspector or tradesperson about your house. Nothing here guarantees a sale price, net proceeds, repair cost, payment, timeline, appraisal, inspection result, or loan approval. Cost figures are planning estimates, not bids. I own Wardmark Property Operations LLC, a contracting company. You are always free to use any contractor you choose.