Pre-approved vs. Pre-qualified

Pre-approved means that your mortgage broker/bank has sent your financial information into Fannie Mae or Freddie Mac and received back an approval. This is an actual approval, so the information will have been as accurate as the loan officer could make it.  (Now this is how we define it, but we think that it might have a different definition to different people, even in the mortgage industry. In other words, we think that it might vary as to whether it has been actually submitted and received back, depending on the relative ease the submitter thinks with that it will be no problem. That is a line the mortgage professionals may skate on- check into it with them as advised and cautioned about here).

The approval is subject to certain conditions being met.  The underwriter reviews the bank statements, pay stubs, math and paperwork of your loan representative, and so forth; if all is accurate, they usually do not overturn the approved status.  The "catch" may be getting all that time investment of time done by the underwriter "earlier on" vs. later, thereby making the "ruling" even tighter as to addtional hoops needing to be climbed through up untill and at the end- leaving some relative uncertainty in your deal. Having gotten the true pre-approval work done, nevertheless, you still have to come up with the down payment and the house has to appraise for the value of the asking price before the approval status has gained final approval.