Pre-Qualification vs. Pre-Approval

Pre-Qualification vs. Pre-Approval

You may have heard of these terms before, but maybe you don’t necessarily know the difference between the two, or for that matter, what either one of them really mean. Below is a short description of each and how both can benefit you as you make your way through the home buying process.


Pre-Qualification is the process of determining how much money you will be eligible to borrow based on an initial interview to exchange essential financial information, including your income, savings and debts. A credit report is not needed.

By “pre-qualifying” you are not only made aware of the general amount of money you’ll be able to borrow, you will also learn about your current financial situation as it relates to purchasing a home. You will also be given tips on how to change or improve your financial status, if needed, to better meet your home purchasing goals. You’ll also learn about specific loan programs that you are qualified for and that will help you meet these goals.


Pre-Approval is the act of becoming conditionally approved for a specific home loan, prior to finding and making an offer for a home. The dollar amount submitted for approval is based upon your personal level of comfort, not to exceed an amount that is likely to be approved.

Documents that you must submit in order to obtain this service include*:

  1. Income: One month of pay stubs & two years of W2 forms.
  2. Assets: Previous two months’ worth of savings, checking and retirement account statements.
  3. Credit History: A credit report, which will be used for a mortgage transaction.

Once we receive the necessary documents, a completed loan application and all other required disclosures needed for a home loan can be produced. Typically, within 24 to 48 hours a “conditional loan approval” (commitment to make a loan) can be issued in the form of a letter that can be presented to real estate agents and sellers as evidence that you are ready and able to purchase a home.

Let’s Talk!

To find out what you can be pre-qualified and/or pre-approved for, USACU is here to help:

  • Questions? Contact Steven Raymond, our resident mortgage expert, via email ( or phone (503.275.0329). He has over 30 years of experience in the industry & loves to talk mortgage.
  • Ready to go? Apply for a mortgage online now.


*On a case by case basis more documentation may be needed to provide evidence of additional income, assets or debts.

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