Two terms that are often (and incorrectly) used interchangeably are “pre-qualified” and “pre-approved”.

A Pre-Qualification typically means a buyer has spoken with a lender (who may or may not have pulled a credit report) and verbally discussed employment, liabilities, payment histories, and assets.

A true Pre-Approval, on the other hand, entails a strict review of the client’s credit, down payment capacity, income, and asset documentation.