Although these terms sound interchangeable, they aren’t. A pre-approval is a much more thorough process, as the lender has already verified the applicant’s credit, assets and income.
Pre-qualified comes from initial information given to the lender by the buyer, but it has not been verified. Even if you’re pre-qualified, you must still be pre-approved.
Getting pre-approved can also tell you your estimated monthly mortgage payments. Once you’re pre-approved, the process for obtaining a mortgage is much faster and you’re less likely to miss out on your dream home.
Although, there are some people who believe that you need to think twice before getting pre-approved. See Forbes article Why Getting Pre-Approved For A Mortgage Is A Sham.