How are pre-approval & pre-qualification different?
While they sound similar, there's a huge difference between loan pre-approval and pre-qualification.
Pre-qualification is the amount you can expect to be approved for. Getting pre-qualified is a quick assessment by a lender of your financial situation based off information you provide. Sellers don't see it as super meaningful because lenders don't ask for proof of your assets and debts at this point.
Pre-approval is more involved and verifiable. Lenders will give you a letter stating the exact loan amount you’ve been pre-approved for & the potential interest rate. It counts as financial documentation for your offer and will be required by a seller. Getting pre-approved requires filling out a mortgage application & providing info so that lenders can confirm your financial situation and credit rating.