Mortgage Pre-Approval
Quick Answer
A lender's conditional commitment to lend a specific amount for a home purchase.
Definition
A lender's conditional commitment to lend a specific amount for a home purchase.
Explanation
Pre-approval involves a hard credit check and document review (pay stubs, tax returns, bank statements). It tells you the maximum loan you qualify for and shows sellers you're serious. Valid for 60-90 days.
Pre-approval differs from pre-qualification (informal, not verified). Sellers typically require a pre-approval letter before accepting offers.
Example
You submit documents to a lender and get pre-approved for a $375,000 mortgage. Now you can shop for homes up to that price with confidence.
Frequently Asked Questions
What is Mortgage Pre-Approval?
A lender's conditional commitment to lend a specific amount for a home purchase.
How does Mortgage Pre-Approval work?
Pre-approval involves a hard credit check and document review (pay stubs, tax returns, bank statements). It tells you the maximum loan you qualify for and shows sellers you're serious. Valid for 60-90 days.Pre-approval differs from pre-qualification (informal, not verified). Sellers typically require a pre-approval letter before accepting offers.
Can you give an example of Mortgage Pre-Approval?
You submit documents to a lender and get pre-approved for a $375,000 mortgage. Now you can shop for homes up to that price with confidence.
Free Excel Templates
Also try our free Home Affordability Calculator template
Calculate the maximum home price you can afford. Analyze mortgage payments, DTI ratios, and down payment impact on affordability.
Download Home Affordability CalculatorAlso try our free Mortgage Amortization Schedule template
Create a detailed mortgage amortization schedule. See exactly how much principal and interest you pay each month over the loan term.
Download Mortgage Amortization Schedule