Preapproval

Prequalification is often a rough look at stated income and debts. Preapproval usually goes further: the lender reviews documentation and may pull a credit report before saying the borrower looks qualified up to a stated amount. Lenders do not all use the two words the same way. This page follows the common consumer distinction without claiming a single legal test. A later underwriting decision can still deny the loan.

Fannie Mae’s consumer glossary describes preapproval as a fuller qualification review than a typical prequalification. Processes vary by lender. This page does not invent a statutory difference stronger than that consumer contrast.

Purchase offers often mention a preapproval letter. Readers need to know it is still conditional.

• Prequalification

• Underwriting

Lender terminology varies. A preapproval is not a closing guarantee.