Preapproval is a lender's tentative statement about a loan amount based on information and assumptions reviewed. It can help you shop, but it is not a guaranteed mortgage or approval of a particular property.
Understand what the letter tells you and what still needs to happen.
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Ask what the lender needs to review your income, savings, debts and credit. Preapproval and prequalification processes vary; either may involve a credit check. Ask what will be checked before agreeing to proceed.
Ask what the lender will check
Processes vary. Ask about income, savings, debt, credit documents and any credit check before proceeding.
Gather the requested documents
Use the lender's instructions; do not assume a letter is based on a full review.
Ask what the result means
Check the assumptions and what is still needed. This is not a final loan promise.
Read the amount, assumptions, conditions and expiration date. A $350,000 letter is not a promise that any home at that price will qualify. Compare the full payment with your budget, not just the letter amount.
Read the amount and date
Check the letter's amount, expiration and assumptions. A $350,000 letter is not a guarantee for every home at that price.
Check the payment against your budget
Include taxes, insurance and other home costs, not just the letter amount.
Ask about remaining conditions
The property, appraisal and final document review can still affect the decision.
Tell your lender before relying on the letter. Changes to income, debt or savings may change the review. The property and appraisal also matter. Ask whether the letter needs to be updated.
Tell the lender what changed
Explain changes to your job, income, debts or savings before relying on the old letter.
Provide updated documents
Ask which records are needed to review the change.
Confirm the next step
Ask whether the letter needs to be updated. Do not assume the same amount still applies.
The amountFitA letter is not the same as your comfortable budget.Details +
For example, a $350,000 letter does not mean every $350,000 home will qualify. Taxes, insurance and your own budget still affect what works.
The conditionsRulesAsk what was checked and what is still needed.Details +
Lenders use preapproval and prequalification differently. Ask which income, savings, debt and credit information was reviewed, which checks are still needed and when the letter expires.
What might your score mean?
A credit score does not decide the full application. Program and lender rules can differ.
Do you also have student loans?
The payment a mortgage lender counts may differ from your current bill. Bring the supporting documents.
Ready to compare real offers?
A preapproval letter is not the same as a Loan Estimate. Compare the payment, fees and cash needed.
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Willa Henderson Fayetteville, NC
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We were blown away by how fast and seamless our closing process was with Troy. He locked in a great rate quickly and handled every detail so we could move into our home on schedule!
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Troy and his team got us to the closing table in record time. They were super efficient and kept everything moving fast!
