Pre Approval vs Pre Qualified

With Peter Pham, Certainty Home Lending

If you’re planning to purchase a property and won’t be using all cash, you’ll need financing to reach that goal.

In this video, Peter Pham breaks down the key differences between a Pre-Qualification and a Pre-Approval—two terms that are often confused but carry very different weight in the homebuying process.

Pre-Qualification:

This is a preliminary step where a lender asks you general financial questions. They do not verify the information with documents or run a formal credit check. It’s a rough estimate of what you might qualify for.

Pre-Approval:

This is a more thorough process. The lender reviews your tax returns, employment verification, income documents, and checks your credit. They also analyze your debt-to-income ratio and let you know exactly which loan products you qualify for based on your credit profile and financial documents.

Understanding the difference between these two can make or break your offer in a competitive market.