Preapproval vs. Prequalification

couple signing contract

The mortgage process can be confusing – full of steps and terms most people aren’t even familiar with. This is why we’ve always aimed to be a trusted mortgage partner, working to help our customers better navigate their journey to purchasing their new home. Which brings us to one of those mortgage topics that tend to throw folks for a loop: preapproval versus prequalification.

They sound awfully similar. They even look similar when written out! But the truth is, they’re quite different depending on your lender. We’ll help clear things up with the following, so you can understand those differences.


What is the Difference

In short, preapproval and prequalification are not the same thing. However, some lenders do use them interchangeably, as every lender handles approval differently.

Prequalification states that you will qualify for a mortgage, but might not give an accurate representation of how much you will be approved for. Prequalification does not use your credit report, and without this, a lender can only estimate what you will be approved for.

Preapproval is a more official step where lenders look at your income, assets and credit score to determine the loan amount and interest rate that you will receive.

How to Utilize and Negotiate

Both preapproval and prequalification will help determine your mortgage rate and what your budget range will be for your future home. Plus, the information from both can, and should, be utilized in negotiating/placing an offer.

Plus, you’ll enjoy more buying power, as sellers are more likely to make concessions for well-qualified buyers who are more likely to close with no issues. If you need repairs or improvements included in your home purchase, or if you want the seller to cover your closing costs, a preapproval or prequalification will help make it more likely that you get what you’re asking for.

When to Apply

With buying a home, timing is everything. Especially when it comes to applying for preapproval or prequalification. We recommend applying for a mortgage preapproval when you are actively in the home buying process, but not so far in advance that you run the risk of your preapproval expiring. A mortgage lender will help you at the beginning of your journey with a prequalification to get a good idea of what you can afford. Then, when you’re ready to place an offer on a home, you can apply for a preapproval.

Applying for prequalification can be done safely and quickly online. At Guardian, we have been doing this for over 56 years, and have the process fine-tuned for you. Learn more about expediting the prequalification process here.

When Do They Expire

In most cases, a mortgage preapproval lasts from 60 to 90 days. Your financial standing could change within a few months, and many lenders aren’t willing to take the risk with a prospective borrower falling through after the 90-day mark. If your preapproval has expired, you will need to get preapproved again.


A prequalification is a good way to get an estimate of how much home you can afford, and preapproval can verify the financial information you submit to get a more accurate amount.  As you can see, they have their similarities but are still very different. Each plays an important role in the home-buying process. Understanding those differences, and how they make each work their best for you is crucial to your success as a home-buyer. Reach out to our team when you are ready to begin either of these steps – they will be happy to help you along the way.