Definition
A detailed evaluation by a lender that tells you how much you can borrow before you start shopping for a home, making you a more competitive buyer.
What to consider
- Gather all necessary documents before applying.
- It gives you a realistic idea of what you can afford.
- Remember that final approval may require additional checks.
Real world scenarios
- Cora’s mortgage pre-approval shows her maximum loan amount, refining her search to homes within a comfortable range.
- Josh’s pre-approval letter gives him an edge in a competitive housing market, demonstrating his serious intent to purchase.
- After a pay raise, Angie updates her pre-approval, widening her list of potential properties to include bigger options.
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