By Maura Stevens
July 2025
When a buyer is ready to purchase a home one of the first things a seller is going to inquire about is whether they have talked with and been vetted by a lender
There are essentially two classifications of vetting:
- Pre-Qualified
With a pre-qualification the lender is giving a buyer a basic estimate of how much they might be able to borrow based on self-reported financial details (like income, debts, and assets). This information is not verified by the lender so if a buyer reports incorrect information then the pre-qualification may not be accurate.
No Hard Credit Check – Usually, in pre-qualification, the lender doesn’t pull a credit report so it makes a pre-approval less reliable without verified credit information.
A pre-qualification is not a guarantee that you will be approved for a mortgage. Since your finances aren’t verified, pre-qualification is just an initial assessment of your borrowing potential.
2. Pre-Approval
Getting a pre-approval from a lender is a much more involved process. As such, it is a stronger commitment because the lender verifies your financial documents (W-2s, tax returns, bank statements, credit report, etc.) to determine how much they are willing to lend you.
During the pre-approval process a hard credit inquiry is performed, which can impact a buyers credit score slightly but will provide buyer with a realistic idea of how much house they can afford.
From the seller’s perspective, pre-approval shows sellers you are serious and financially capable, making your offer much stronger in a competitive market.