Prequalified vs. Preapproved: What’s the Difference and Why It Matters

Posted by : Moneek-2

If you’re getting ready to buy a home, you’ve likely heard the terms “prequalified” and “preapproved.” While they sound similar, they serve very different purposes in the mortgage process—and understanding the difference can make all the difference when it’s time to make an offer.

What Does It Mean to Be Prequalified?

Prequalification is an early step that gives you an estimate of how much you might be able to borrow. It’s based on self-reported financial information and is a great way to start setting expectations. However, it’s not a guarantee—you’ll still need to provide documentation later in the process.

Preapproval Carries More Weight

Preapproval takes things a step further. During this process, MIG reviews your financial documents—like pay stubs, W-2s, and bank statements—to verify your information. Once approved, you’ll receive a letter stating how much you’re qualified to borrow, which gives you a strong advantage when competing for homes.

Why It Matters in Today’s Market

In a competitive housing market, sellers take preapproved buyers more seriously because they’ve already demonstrated financial readiness. Having a preapproval in hand can help you move faster and negotiate with confidence.

At Mortgage Investors Group, we’re here to guide you through both stages so you can shop for your dream home with clarity and peace of mind.

Prequalified vs. Preapproved: What’s the Difference and Why It Matters