What Is the Difference Between Pre-Approval and Pre-Qualification?
Explained by Tim Scheib, Des Moines Real Estate Professional with Real Broker
Homebuyers are often bombarded with complex jargon, and two of the most commonly misunderstood terms are “pre-approval” and “pre-qualification.” Both are important steps on the journey to homeownership, but understanding their differences can give you an advantage in Des Moines’ competitive market.
Why Do These Terms Matter?
Before you even view a home, sellers and agents will want proof you’re a serious buyer. The stronger your financial position looks on paper, the better your chances to win your dream home—especially when multiple offers are on the table. So, being “pre-qualified” or “pre-approved” means you’ve taken steps to show lenders (and sellers) you’re ready to buy.
Pre-Qualification: The Quick Overview
Pre-qualification is like a gentle first step. You provide basic financial info—income, debts, savings, and sometimes a self-reported credit score—often online or over the phone. The lender gives an estimate of how much you might be able to borrow, based on what you’ve told them. No documentation or official checks are required.
Pros:
Quick and easy (often takes just minutes)
Gives you a starting point for home shopping
Helps you spot areas needing work, such as saving more or reducing debts
Cons:
Relies on self-reported info (not verified)
Holds little weight with sellers, since it’s not official
Can change significantly when the lender reviews real documentation
Pre-Approval: The Gold Standard
Pre-approval is a more rigorous process. Here, you submit actual financial documentation: pay stubs, tax returns, bank statements, and permission for a credit check. Lenders assess your true borrowing power and issue a pre-approval letter stating the official amount and terms for which you qualify.
Pros:
Official and verified—shows sellers you’re serious
Allows you to make stronger offers in competitive situations
Gives you a clear budget and confidence when shopping
Cons:
Takes more time (often a few days)
Requires paperwork and documentation
Usually has an expiration window (often 60-90 days)
Which Is Better for Des Moines Homebuyers?
In our local market—where demand can be high, especially under $350,000—pre-approval is your competitive edge. I always advise clients to start here. Sellers in Des Moines know that a pre-approved buyer is less likely to have financing fall through, which makes your offer more attractive.
How to Get Started
If you’re considering a home purchase, start with your local lender. Let’s work together to collect your paperwork, understand your goals, and secure a pre-approval letter. If you’re not quite ready, pre-qualification can help you set a savings plan and timeline.
How Pre-Approval Helps You Win
With a pre-approval:
You can move quickly when the right home hits the market
You’ll stand out against less-prepared competitors
You’ll avoid heartbreak from a denied loan after offer acceptance
My Role as Your Advocate
As your agent, I’ll help coordinate with lenders, answer paperwork questions, and make sure the process is smooth. Teamwork is essential—my network of Des Moines lenders can often speed up approval and spot gaps before they become obstacles.
Final Thoughts
Don’t let real estate jargon slow you down. Understanding the difference—and getting pre-approved—puts you in control. Let’s talk today to set up your homebuying strategy, whether you’re ready to buy now or want to lay the groundwork for the future.
Reach out anytime for local lender recommendations, or to discuss your options—your path to homeownership starts here.