Pre-Approval vs. Pre Qualification: What’s The Difference?
Why Do Utah Home Buyers Need A Pre-Approval Letter Before Viewing Homes?
Have you ever called a Utah real estate agent and asked to view a home and they’ve asked if you have a pre-approval letter?
Do you wonder why having a pre-approval letter is important before you look at homes and why many agents won’t even show you a home without one?
Pre-approval letters demonstrate that you have visited a mortgage lender and provided all the right documentation to show that you have qualified for a home loan and can purchase a home within a specified price range.
With a pre-approval letter, your real estate agent can show a home seller that you, as a home buyer, are willing and able to purchase their home.

What Is A Pre-Approval Letter?
A pre-approval letter is a document issued by a mortgage lender that indicates that you have filled out a mortgage application and they have performed a variety of checks on your creditworthiness that demonstrates that you may qualify and be approved for a mortgage loan.
This is an offer, but not a commitment, that shows that the lender would be willing to underwrite your loan and it is good for up to 90 days after issuance.
A pre-approval letter means that you have submitted the following information to your loan officer:
-
- Pay stubs that reflect the last 30 days of income
- A credit check
- Bank account numbers and statements
- Down payment amount you have
- Loan amount that you are approved for
- W-2 statements
- Tax returns for the last 2 years
Home Buyer’s Tip:
When you are approved for a certain mortgage loan amount, you may be approved for more than you can actually pay each month. It’s important to review your budget and not become “house-poor,” where all you can afford is your monthly mortgage payment and not much else.
Learn more about How To Get Pre-Approved For A Home Loan.

What Is A Pre-Qualification Letter?
A pre-qualification letter is an early step in the mortgage pre-approval process. It’s simply an estimate based upon the income you’ve provided as to how much mortgage you can afford.
As you research potential mortgage lenders, you can get various pre-qualification letters and estimates, which will show you how much a lender’s origination fees are, what interest rates they offer, and other loan terms.
Since a pre-qualification letter does not do a hard credit pull, you can check with several lenders before applying for a mortgage.
A pre-qualification letter will provide an estimate of what you might be able to borrow, but it’s no guarantee. You will receive a pre-qualification letter when you submit the following information:
-
- Income (no proof)
- Credit check
- Basic bank account information (unverified)
- Desired loan amount

What’s The Difference Between A Pre-Approval Letter and A Pre-Qualification Letter?
Since a pre-qualification letter is only an estimate, and not a statement from a lender stating that they will likely loan you money, many Utah real estate agents may not accept a pre-qualification letter as a basis for showing you a home in Utah.
A pre-approval letter is a statement from a mortgage lender that states that based upon the information provided and the current creditworthiness of the applicant, they will most-likely approve a loan for the amount listed in the letter.
Important Note For Home Buyers!
A pre-approval letter is also not a hard guarantee that you will get the financing you’ve applied for. Financing can fall through for a myriad of reasons, which is why it’s important to not make large purchases or quit your job when you are trying to get a home loan.
When viewing Utah homes for sale with a Real Estate Agent, it’s a good idea to have a pre-approval letter in-hand.

Will You Show Me A Home
Without A Pre-approval Letter?
If you are a cash buyer or will be financing your home without going through a hard money lender, you may need to provide other proof that you are able to buy the home in question.
For the most part, if you are interested in a home and you are in the early stages of the home buying process, your Utah real estate agent may sign you up for listing alerts to show you potential properties available on the Wasatch MLS.
However, your Real Estate Agent will advise you to obtain a pre-approval letter quickly in order to continue showing you homes on the Utah marketplace.
Why Is It Important To Have A Pre-Approval
Letter Before Looking At Homes?
The last thing you want is to view a home for sale that you fall in love with that you lose during the bidding process because you don’t have a pre-approval letter.
Having a pre-approval letter already in-hand when you bid on a home that you want to buy, means that you are several steps ahead of other buyers. Your bid will be taken more seriously by potential home sellers with a pre-approval letter.
Get more information on How To Make A Winning Offer; Tips For Utah Home Buyers In A Seller’s Market.
In The Market To Buy A Utah Home?
Call Your Utah Realty
If you are looking to buy a home in Utah, call the real estate agents at Your Utah Realty at (801) 893-8880 or contact us today!
You can also sign up for listing alerts from the Wasatch MLS here.