Watch this video and it’ll easily explain the differences between a mortgage pre-approval and a home loan pre-qualification.
Pre-qualification is an informal way to see how much mortgage you maybe able to borrow. You can be ‘pre-qualified’ over the phone with no paperwork by telling a home lender your income, your long-term debts and how large a down payment you can afford. Without any obligation, this helps you arrive at a ballpark figure of the amount you may have available to spend on buying a house.
A mortgage lender pre-approval is the actual mortgage loan commitment to you. It involves assembling financial records and going through a preliminary approval process. Pre-approval gives you a definite idea of how much house you can afford and shows sellers that you are serious about buying.