Reader question: “I’m hoping you can settle an argument for me. I was pre-approved for a mortgage loan about 10 days ago, and we are now starting to look at houses for sale. My husband said we have to be careful what we do with our finances because we can still be denied for the loan, even though we’ve already been pre-approved by the lender. Is this true? I thought the difference between pre-qualification and pre-approval was that the latter was more set in stone.”

I hate to be the cause of any marital discord, but your husband is right on this one. You can certainly be denied for a mortgage loan after being pre-approved for it. The main difference between pre-qualification and pre-approval has to do with the level of scrutiny — not the level of certainty.

When a lender pre-qualifies you for a loan, they just take a quick look at your financial situation. Then they throw out a number they might be willing to lend you. It’s all very breezy and informal (i.e., worthless). The pre-approval process goes deeper. This is when the lender actually pulls your credit score, verifies your income, etc.

But neither of these things guarantees you will get the loan. The only time you can be 100% certain of your mortgage approval is when you close the deal. Up until that time, there are plenty of things that can derail the process. So yes, you do need to be careful with your finances between now and your closing date.

The Pre-approval Process Explained

I want to talk a little more about the process that takes place here, for readers who aren’t familiar with it. Getting pre-approved for a mortgage loan is a good idea for several reasons.

• It helps you identify any problems you have in terms of mortgage approval.
• It helps you get a real estate agent, since most of them won’t work with buyers until they’ve been pre-approved. Read more