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Process

Pre-Approval

A written commitment from a lender stating how much they are willing to lend you, based on a review of your credit, income, assets, and debts. Pre-approval involves a hard credit check and is stronger than pre-qualification. Most sellers and real estate agents expect you to have a pre-approval letter before making an offer on a home. Pre-approval letters are typically valid for 60 to 90 days.

Why It Matters

Pre-Approval is one of the steps you will encounter on the path from house hunting to holding the keys. Knowing what to expect at each stage reduces stress and helps you make better decisions under time pressure.

Stay organized and communicate proactively with your real estate agent, lender, and other professionals involved in pre-approval. Delays and misunderstandings at any step can push back your closing date or cost you money.

Related Terms

Pre-QualificationCredit ScoreDebt-to-Income Ratio (DTI)Underwriting

Tools That Use This Concept

MMortgage Payment CalculatorMAffordability CalculatorMClosing Costs Guide
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