Definition
Pre-approval is formal verification that you qualify for a specific loan amount based on documented financial information and credit review. It demonstrates to sellers you're a serious buyer with verified buying power. It's conditional on appraisal and underwriting, not a guarantee.
Where you’ll meet it
Am I ready? Money, credit, and what it really costs
See it in Buying my first home · Step 1About this term
Pre-approval is when a lender verifies your credit, income, and assets to confirm how much mortgage you can qualify for. It's not a final approval but shows sellers you're a serious buyer. Pre-approval typically lasts 60-90 days and requires a formal credit check.
Pro Tip
Get pre-approved before viewing homes and making offers to strengthen your negotiating position with sellers.
Example
A pre-approval letter stating you can borrow up to $400,000 gives sellers confidence in your offer and lets you shop within your budget.