What is a Pre-Approval Letter?

A Pre-Approval Letter is an official statement from a lender indicating conditional approval for a mortgage loan up to a specified amount. Lenders base this on a preliminary check of income, credit score, and debt ratio, giving prospective buyers greater credibility when making offers.

• Conditional Assurance: Dependent on final underwriting and property appraisals.
• Improves Negotiation: Sellers trust buyers backed by lender documentation.
• Time-Sensitive: Typically valid for 60–90 days; requires re-evaluation afterward.
• Streamlines Process: Buyers know their budget, reducing guesswork.

Pre-approval strengthens buyer positions in competitive markets, showcasing genuine financial capability to sellers.