🏠 Prequalification vs. Pre-Approval in Texas: Which One Do You Need?

If you’re buying a home in Texas, chances are you’ll be shopping with a “prequalification” letter in hand—even if your lender has pulled credit, collected income docs, and run AUS. So what’s the deal?  Let’s clear the air on one of the most misunderstood (but important!) parts of the homebuying journey—especially for buyers in Katy, Houston, and across the Lone Star State.

💬 What is Prequalification in Texas?

Spoiler alert: It’s more thorough than you think.

In Texas, a prequalification often includes:

• ✅ A full credit pull
• ✅ Collection and review of income/assets documents
• ✅ Running findings through an Automated Underwriting System (AUS)

That sounds like a pre-approval, right? And in most states, it would be. But here’s the kicker…

⚖️ Why It’s Called “Prequalification” (Texas Compliance 101)

Under Texas mortgage laws, brokers and loan officers are required to issue a prequalification letter—not a pre-approval—unless and until the full loan file has been reviewed by an underwriter.

📝 That underwriter review typically happens after you’re under contract on a home.

This ensures:

• ✅ Lenders aren’t issuing misleading promises
• ✅ Consumers are protected from being overconfident
• ✅ Letters comply with regulatory standards

Some lenders may do a “TBD underwrite” (To Be Determined property) before a home is found. So, in Texas, your rock-solid prequalification letter is the standard for making offers—even if it looks and feels like a pre-approval everywhere else.

🔍 Prequalification ≠ Casual Estimate (At Least, Not With Me)

As a mortgage broker in Katy, TX, I treat prequalification seriously. I take the time to:

• Collect full financial documentation
• Pull and analyze your credit report
• Run AUS to get approval-ready results

By the time you’re shopping, you’re armed with a letter that holds real weight in competitive markets like Houston, Sugar Land, or The Woodlands.

🏡 Texas Buyers: Here’s What To Know

• A prequalification letter is the norm in Texas when placing offers
• It’s just as rigorous (with me, anyway) as what many call “pre-approval” elsewhere
• A pre-approval letter requires full underwriting—usually done after you’re under contract

🤝 Let’s Get You Offer-Ready

I’m Kory Small, a mortgage broker based in Katy and serving all of Texas. Whether you’re a first-time homebuyer, investor, or looking to refinance, I’ll make sure you’re properly positioned to win the home you want—with full transparency every step of the way.

✅ Curious how much home you can afford?
🧮 Run your numbers with my Home Affordability Calculator HERE

📞 Want to start the process and get offer-ready?
👉 Schedule a call with me here