Last updated: September 2025
Quick Answer
Prequalification is an unverified estimate of your buying power, while preapproval is a lender-verified commitment based on your credit, income, and assets.
In today’s competitive housing market, only preapproval gives you the edge to make a strong VA loan offer.
Why first-time VA buyers need to understand the difference
As a VA loan buyer, getting your financing in order before house hunting is critical. But many veterans and service members confuse prequalification with preapproval. And that mistake can cost them a home.
In 2025, most sellers won’t accept an offer supported only by a prequalification letter. If you’re serious about using your VA loan benefit, preapproval isn’t optional—it’s essential.
What is a VA loan prequalification?
Prequalification is an initial estimate of how much home you might afford based on self-reported information.
It involves:
- No credit check
- No document verification
- No underwriting review
Prequalification is often the first step for buyers just exploring their options. It can be done online or over the phone in a few minutes.
What prequalification tells you:
- A ballpark purchase range
- Whether your income seems sufficient
- What loan type might you consider (e.g., VA, FHA)
What it does not do:
- Verify your credit score
- Check your debt-to-income ratio (DTI)
- Issue a letter that sellers take seriously
- Lock in a real financing commitment
Summary: Prequalification is useful for planning, but not for making offers.
What is VA loan preapproval?
VA loan preapproval is a verified financial commitment from a VA lender. It requires a full review of your:
- Credit report (hard inquiry)
- Income documents (pay stubs, W-2s, tax returns)
- Asset statements (bank accounts, savings, etc.)
- Certificate of Eligibility (COE) for VA entitlement
Once verified, the lender provides a verified preapproval letter that states how much you are qualified to borrow under the VA loan program.
What preapproval tells you:
- The exact loan amount you qualify for
- Your interest rate range (if rate-locked)
- That your finances meet VA and lender standards
- That you’re ready to make an offer now
Preapproval also includes a preliminary underwriting review, meaning your file may already be halfway to closing when your offer is accepted.
Why preapproval matters in a competitive market
In 2025, homes often receive multiple offers within a matter of days. Sellers and listing agents favor buyers who present:
- A strong, verified preapproval letter
- Financing from a VA-savvy lender
- Evidence of earnestness and reliability
By contrast, a prequalification letter may signal to the seller that you haven’t been vetted and could be a risky buyer.
Seller perspective:
- Prequalified = “Maybe they can buy this house”
- Preapproved = “They’re ready to close with verified financing”
In multiple-offer situations, preapproval can be the deciding factor, even over higher bids.
Key differences between prequalification and preapproval
| Feature | Prequalification | Preapproval |
|---|---|---|
| Credit check | No | Yes (hard inquiry) |
| Income verification | Self-reported | Verified with documents |
| Asset verification | No | Yes |
| COE and VA entitlement check | No | Yes |
| Underwriting review | No | Often partial |
| Accuracy | Approximate | Confirmed by lender |
| Offer strength | Weak | Strong and competitive |
| Use in home search | Informational only | Required for serious offers |
What’s in a VA preapproval letter?
A legitimate VA preapproval letter includes:
- The borrower’s name
- The maximum loan amount approved
- The loan type: VA-backed mortgage
- The lender’s contact and licensing info
- A statement that income and credit have been verified
- An expiration date (usually 60–90 days)
This letter signals to the seller that you’ve already completed most of the financial legwork and can close faster.
Steps to get preapproved for a VA loan
If you’re ready to buy, here’s how to move from prequalification to full VA preapproval:
1. Choose a VA-experienced lender
Not all lenders specialize in VA loans.
Work with one who understands:
- Residual income guidelines
- Entitlement and COE processing
- VA appraisal and closing timelines
2. Submit key documents
Most lenders will ask for:
- COE or DD-214
- Pay stubs (last 30 days)
- W-2s and/or tax returns (2 years)
- Bank statements (2 months)
- ID and Social Security card
3. Complete the application
Your lender will pull your credit report and run an automated underwriting system (AUS) to issue a decision.
4. Receive your preapproval letter
Once approved, you’ll receive a letter that’s valid for up to 90 days and can be included with your next offer.
Common myths about VA preapproval
Some of the most common myths about VA loans include
Myth 1: Prequalification is enough for a VA loan
Fact: Prequalification is not accepted by most sellers in today’s market. You need full preapproval to compete.
Myth 2: Preapproval hurts your credit
Fact: A single hard inquiry may lower your score by a few points temporarily, but it’s necessary for verified lending.
Myth 3: You should wait to get preapproved until you find a home
Fact: You should be preapproved before house hunting. That way, you know your budget and can make an offer immediately.
FAQ: Preapproval vs prequalification
Prequalification is based on unverified estimates. Preapproval is based on verified income, credit, and assets—and provides a genuine buying limit.
Yes. Most sellers require a preapproval letter from a lender to consider your offer seriously in today’s market.
Yes, your lender will pull a hard credit report as part of the preapproval process.
You can typically get preapproved within 1–3 business days if you submit your documents promptly.
Yes. You’re not locked in, but staying with your original lender may expedite the closing process if they’ve already reviewed your file.
Ready to get preapproved and shop with confidence?
If you’re planning to buy a home with a VA loan, preapproval is your competitive advantage. Don’t risk losing the right home over paperwork.
Start the process early, submit your documents, and work with a VA lender who can back your offer with verified numbers and expedite the process.
Ready to make confident offers? Get your verified VA preapproval now.
