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. Learn how to get pre-approved for a mortgage.
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.
Common question
What is the difference between pre-approval and pre-qualification?
Pre-qualification is based on self-reported information. Pre-approval involves verification of income, assets, and credit — so it carries more weight with sellers and agents.
Is a pre-approval a guarantee?
No. It is subject to conditions such as a satisfactory appraisal and no major changes to your finances before closing. Final approval comes after underwriting.
Related Topics
Related Mortgage Terms
Ready to find out what you qualify for? A pre-approval gives you real numbers and real buying power.
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