How are pre-qualifying and pre-approval different?

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 much 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 mentioned in Question 47 (without the property description and sales contract) 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.