A pre-approval is obtained when a prospective buyer pays for a credit report and supplies the lender with necessary documentation to determine employment and income/debt ration. Upon pre-approval, the lender is able to give the buyer and their Kentucky Realtor® a letter verifying a pre-approved loan amount and any other stipulations needed to obtain the loan. Other stipulations may be that the buyer must sell their existing property, pay off a debt, subject to an accepted Offer to Purchase contract or subject to appraisal. This should all be detailed in the letter.
You can be pre-qualified by simply giving the lender information via the telephone or the Internet. The lender will generally give you a loan amount based on the information you have given them. This is all subject to verification and therefore is not worth much in the seller's eyes.