Pre-Approval
A pre-approval is a formal evaluation by a lender in which your income, assets, credit history, and employment are reviewed to determine how much you can borrow and under what terms.
Unlike a pre-qualification, which is based on self-reported information, a pre-approval involves verification of documentation and a credit pull. It results in a letter that demonstrates to sellers and agents that you are a serious, qualified buyer.
A pre-approval is not a loan commitment. It is based on current financial information and is subject to conditions, including a satisfactory appraisal and no significant changes to your financial profile before closing.
Why This Matters: In a competitive market, a pre-approval can make the difference between having your offer accepted or passed over. It signals credibility, preparedness, and financial strength to everyone involved in the transaction.
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