Before you start your home search, it’s a smart idea to get pre-qualified for a home loan. And before you make an offer on a house, it’s a great idea to get pre-approved for a mortgage. If you want to demonstrate to sellers that you are an attractive – and qualified – buyer, it’s wise to pursue getting prequalified and it can pay off in the end when a seller knows you have the funds to get the mortgage. Here’s the difference between pre-approvals and pre-qualifications and how – and why – to do both. 


The Difference Between Mortgage Pre-qualification and Pre-approval

You may have heard the terms pre-qualification and pre-approval used interchangeably, but they have different meanings. A pre-qualification for a mortgage is the first step you’ll take in the mortgage pre-approval process. Many lenders, including University Credit Union, don’t charge a fee for a pre-qualification, and this is a simple process you can complete online or over the phone.

For a mortgage pre-qualification, University Credit Union will review your income, debt and assets to give you a pre-qualification letter, which is a high-level estimate of how much they would lend you for a mortgage and how much home you can afford. Keep in mind that just because you can qualify for a certain mortgage payment doesn’t mean that’s the best way to set your budget.

Getting pre-approved for a home loan helps you determine how much you can truly afford; takes the guesswork of out knowing how much the home will cost you; and helps sellers take your offer more seriously. A pre-approval for a mortgage is much stronger than getting pre-qualified for a mortgage. This will require University Credit Union to pull your credit, so we can provide a pre-approval letter that provides a more accurate view of your interest rate and the specific amount that you can take out for a mortgage. Pre-approval letters are typically good for 60 to 90 days, and most lenders charge a fee for getting one.


How to Get Pre-Approved for a Mortgage

The mortgage pre-approval process is similar to applying for a mortgage in that you’ll need to provide many of the same documents:

  • Your previous two years of W-2s and tax returns
  • Your previous three months of pay stubs
  • Your bank account statements
  • A signed authorization to pull your credit


Once you send these documents to University Credit Union, we will submit the information to our underwriter for review. If you qualify, we will issue you a pre-approval letter, which will outline the amount that you’re pre-approved for, and any conditions that must be met. This is a tentative commitment that you can receive that funding from that specific mortgage lender. You will still need to apply for a mortgage when you are ready.


If you are planning to buy a home, getting pre-approved for a home loan is an important first step.

Ready to make a move? University Credit Union can help. Call 800.UCU.4510 or contact us here. We strive to make the home ownership process as easy as possible and offer life hacks such as combining a home loan with an auto loan rewards an extra 1.00% APY* on your checking account balance up to $25,000. What are you waiting for?