What are the actual differences between the two? A lot of websites claim different things so I’m now confused.
Hi @Rohit Saigal ! Welcome to the BP forums! A pre-qualification is a less formal ordeal altogether and, as a result, is less significant. It simply means "I've spoken with a loan professional and what I told them sounds good." A pre-approval usually involves providing real information to the lender and having them issue a light approval, which is then subjected to the full underwriting process.
Sometimes they are used synonymously, and sometimes pre-qualified doesn't actually mean anything at all. For this reason I would always recommend being pre-approved with a lender and making sure the seller considering your offer knows you are pre-approved with an excellent lender (usually NOT quicken loans BTW).
@Will Fraser thanks for the prompt response! What are the physical differences between the two? In other words what do they actually look like? How do I know that what I’m looking at is a preapproval
It's my pleasure, @Rohit Saigal ! They are usually both an email or a piece of paper. The only way to know the difference is based on whaat it says in the header or (if you are the one asking for it) what you ask of the lender.