Pre-approval is the first step many people take before buying a home or explore for a major loan. A lender reviews your financial situation—income, credit history, debts, and assets—to determine how much money they're willing to lend you. This letter or document shows sellers and real estate agents that you have serious purchasing power, which can strengthen your position in a competitive market. Understanding what pre-approval means and how it differs from pre-qualification helps you move forward with realistic expectations about what you can afford.
The articles here cover the practical questions that come up during the pre-approval process: what documents lenders typically request, how your credit score and debt-to-income ratio affect the amount you can borrow, what happens after you receive pre-approval, and how pre-approval fits into your larger borrowing strategy. You'll also find information about the costs involved, how long pre-approval lasts, and what can change between pre-approval and final loan approval.