The Crucial Difference: "DU" vs Pre-Approval

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Real Estate

When it comes to securing a mortgage, many home buyers mistakenly believe that being pre-qualified or pre-approved by a lender guarantees a smooth path to obtaining a home loan. However, it's essential to understand the significant disparity between these two terms. In this blog post, we will clarify the distinction between pre-approval and DU (Desktop Underwriting) approval, shedding light on why the latter is crucial for buyers and how a misunderstanding can have detrimental consequences.

The Pre-Approval Process:

To achieve pre-approval, buyers must complete an official mortgage application and provide the lender with the necessary documentation. The lender then conducts a thorough evaluation of the buyer's credit rating. Based on this assessment, the lender determines the approved mortgage amount and provides an estimate of the interest rate. Buyers receive a pre-approval letter indicating a maximum purchase price, allowing them to search for homes within or below that price range.

DU: The Power of Automated Underwriting:

DU (Desktop Underwriter), along with Loan Prospector, is a computer application used to analyze loan applications and credit profiles. It involves inputting financial, personal, and employment information into DU, which then assesses the data and provides a recommendation on whether the loan meets minimum guidelines.

Benefits of DU Approval:

  • DU helps lenders make informed credit decisions on conventional conforming, non-conforming, and government loans.
  • For certain loans submitted to DU, Fannie Mae will also waive some underwriting requirements that are typically required of lenders when loans are delivered to Fannie Mae. 
  • Compensating factors are allowed if DU gives you a favorable recommendation.   For example DU may allow a little higher debt ratio if the borrower/buyer has extra cash reserves in the bank or they might be putting a larger down payment. 
  • If the recommendation is a "refer", which means the loan does not qualify under the guidelines, DU will specify why the loan did not meet minimum criteria. 

The Edge in Home Purchasing:

Including a DU Approval along with a pre-approval letter when submitting offers to purchase a home can significantly impact the seller's perception. It demonstrates that the buyer's financial situation aligns with guidelines and that they are working with a lender dedicated to ensuring strong qualifications. Sellers are more likely to view offers from buyers with DU approvals as reliable and experience fewer instances of transaction failure.

Important Considerations:

Although a DU approval does not guarantee full loan approval, as it is subject to a preliminary title report, property appraisal, and verification by a real underwriter, it remains a crucial step. It's essential to provide accurate information during the DU process, as incorrect data can lead to a decline.


For buyers and realtors, obtaining a DU approval holds immense value when navigating the mortgage process. Beyond the initial pre-approval stage, DU approval adds credibility and confidence to offers submitted to purchase a home. By demonstrating compliance with guidelines and the extra effort invested in thorough assessment, buyers stand out as more trustworthy and serious contenders. If you're considering a home purchase, don't forget to ask your lender for a DU approval. And if you want a seamless experience, reach out to a Seasons Group team member, where obtaining DU approval is a standard practice.


The Seasons Group at Keller Williams

2419 E Commercial Blvd

Fort Lauderdale, FL 33308



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