What is the difference between a Pre-Qualification and Pre-Approval?

Getting pre-qualified is the initial step to getting pre-approved. The potential borrower sends in their paperwork to the lender to have them review the information regarding, debts, income, assets and credit history. From there, the Mortgage Loan Originator is able to verify and confirm what the borrower is able to afford for the loan amount. Which then moves forward to a pre-approval, this is when the mortgage application is completed and the commitment to the loan amount is established with a pre-approval letter. The borrower is then on their way to finding their future home!