The pre-approval process is more complete than pre-qualification. For a pre-qualification, a loan officer or broker asks you a series of questions and based on those answers and a review of your credit report, you receive a pre-qual letter. A pre-approval involves all the necessary steps for a loan to be approved, except for the title search and appraisal. A thorough review of your documentation during the process puts you in a better position to negotiate with a seller, because you are closer to a full loan approval