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What's the Difference Between a Pre-qualification and Pre-approval?


By Laura Haverty

The home buying process often involves a lot of industry jargon and technical terms that can make the whole thing feel very confusing. That’s when you can rely on the trusted professionals at AAFMAA Mortgage Services LLC (AMS) to help decipher what you need to know and navigate your path to homeownership.

Two terms you will hear a lot when you start working with a Realtor® and shopping for home financing are pre-qualification and pre-approval. They may sound very similar. What’s the difference? How do they help you? Is one better than the other? And how do they work?

In either case, we encourage you to contact us at the earliest stages of your home-buying search to get a good idea of how much you can comfortably spend on a home.If your finances are strong, with a good to excellent credit score, we will work with you to determine if pre-qualification or pre-approval are best for you.


For a pre-qualification, an AMS Military Mortgage Advisor will ask you questions about any previous homeownership and your income, assets, and debt. This gives us an overall sense of whether or not you would qualify for a loan. This conversation could happen over the phone or in person, and you’ll probably get an answer on pre-qualification the same day.

There are a few red flags that would indicate you’re not ready to buy. If, for example, you had a recent foreclosure, there’s a “seasoning period” before you can apply for a new VA Loan.If there are no obvious red flags, AMS will pre-qualify you up to a certain amount and send you a pre-qualification letter. Keep in mind, we have not vetted your information externally at this point.


External validation carries more weight with real estate agents, and, more importantly, sellers.That’s why many borrowers value having a pre-approval over a pre-qualification. A pre-approval can take slightly longer because AMS checks your information with external third-party verifiers.

There are two stages for pre-approvals. To start, you’ll need to fill out a loan application and provide AMS with:

  • Three months of bank statements. Be sure to include all pages, even those “intentionally left blank.”
  • Proof of your income for two years. This means W-2s, or 1099s for self-employed borrowers.
  • Federal tax returns for the past two years
  • Recent pay stubs or proof of direct deposits

We’ll use an automated underwriting system to independently verify your income, assets, and debt. An AMS underwriter compares those findings with the information you provided. If your initial information is consistent and meets our underwriting guidelines, we’ll provide you with a pre-approval letter indicating you may qualify for a loan of up to a certain amount.

This process can take just a day if the information you’ve supplied is complete and accurate. If we have to ask for additional or more current information, the process can take longer. And, remember, a pre-approval is not a guarantee you’ll get a loan. You’ll still have to apply for a loan and go through the underwriting process.

Use our calculators to determine how much you could borrow.

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We Can Help

AAFMAA Mortgage Services LLC (AMS) is part of AAFMAA, a not-for-profit, member-owned association exclusively serving military members and Veterans. We can help you understand how to strengthen your credit score and prepare you for homeownership. We offer a wide range of low-rate and low-cost mortgages designed to meet the needs of our Members.

If you’re thinking about buying a home, a Military Mortgage Advisor can help you understand the home-buying process and which mortgage options might be best for you, including VA loans.  AMS is an Equal Housing Lender, NMLS 1423968.  Contact us today at 844-211-6308 or visit us online at www.aafmaa.com/mortgage for more information.