What Is Pre-Approval?

Pre-approval is a lender’s conditional commitment to lend you a specific dollar amount after verifying your income, assets, employment, and credit. It involves a hard credit pull and document review, making it far more reliable than a pre-qualification. A pre-approval letter signals to sellers that you are a serious, financially vetted buyer.

For example, if you earn $95,000 per year with a 740 credit score, $20,000 in savings, and $600 in monthly debts, a lender might pre-approve you for up to $375,000. The process typically takes 1–3 business days and requires pay stubs, W-2s, bank statements, and tax returns. Your pre-approval letter is usually valid for 60–90 days.

Key Facts

• Documents required: Pay stubs, W-2s, tax returns, bank statements, and ID
• Credit impact: Involves a hard inquiry, which may lower your score by 2–5 points temporarily
• Validity period: Typically 60–90 days from the date of issuance
• Conditional: Subject to final underwriting, appraisal, and continued financial stability
• Strength: Widely preferred by sellers and listing agents over a pre-qualification

Frequently Asked Questions

Why is a pre-approval better than a pre-qualification?

A pre-approval is based on verified financial documents and a hard credit check, so lenders and sellers trust it more. In competitive markets, many sellers will not consider an offer without a pre-approval letter, since it demonstrates you can actually secure financing.

Can my pre-approval amount change?

Yes. If your credit score drops, your income changes, or you take on new debt between pre-approval and closing, your lender may reduce or revoke your pre-approval. Avoid major financial changes—like switching jobs or opening new credit accounts—after receiving your pre-approval.

Does a pre-approval guarantee I will get the loan?

No. Pre-approval is conditional. Final approval depends on the property appraisal, a clear title, and your financial situation remaining stable through closing. The lender’s underwriting team makes the ultimate decision.