Pre-qualification is an informal way to see how much you may be able to borrow. You can be ‘pre-qualified’ over the 
phone with no paperwork by telling a lender your income, your long-term debts, and how large a down payment you 
can afford. Without any obligation, this helps you arrive at a ballpark figure of the amount you may have available 
to spend on a house.

Pre-approval is a lender’s actual commitment to lend to you. It involves assembling the financial records and going 
through a preliminary approval process. Pre-approval gives you a definite idea of what you can afford and 
shows sellers that you are serious about buying.