A pre-approval is generally a written statement from a lender stating the lender’s preliminary determination that a borrower would qualify for a particular loan amount under that lender’s guidelines. The determination and loan amount are based on income and credit information. Most pre-approval letters are good for 60 to 90 days.
Does Pre-Approval Guarantee a Loan?
No. Even if you receive a pre-approval letter from a lender you connected with on Zillow, you may not get a loan from a lender and you are not guaranteed a specific rate or loan term. Regardless of pre-approval, a lender may require additional income and asset verification, as well as the satisfaction of other conditions, before extending you a loan. Pre-approval letters are subject to modification or cancellation if your financial situation or other conditions change. A pre-approval letter is not an offer to lend, a commitment to make a loan, or a guarantee of specific rates or terms. This online questionnaire is not an application for credit. Also, having a pre-approval letter does not guarantee that an offer you make on a home will be accepted by a seller.
Have you been pre-approved yet? Find a local lender on Zillow who can help
Why Should You Get Pre-Approved?
There are many reasons why you should get pre-approved. The most important reason is that you will get an accurate idea of how much home you can afford. This can help to target your home search and ensure you only look at houses that are truly in your price range. A pre-approval letter also helps you prove to real estate agents and sellers that you’re a credible buyer and able to act fast when you find the home you want to buy. Some sellers might even require buyers to submit a pre-approval letter with their offers, though having a pre-approval letter does not guarantee that your offer will be accepted by a seller. A pre-approval letter can make you stand out in a competitive real estate market. If you make an offer on a house without a pre-approval, your offer may not be taken as seriously as an offer from another person with a pre-approval.
In lending, pre-approval has two meanings:
1. The first is that a lender, via public or proprietary information, feels that a potential borrower is completely credit worthy enough for a certain credit product, and approaches the potential customer with a guarantee that should they want that product, they would be guaranteed to get it. This...
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