Pre-Approval

A pre-approval is a lender's written statement that a buyer qualifies for a mortgage up to a stated amount, based on a review of income, assets, debts, and credit. It is conditional and is not final loan approval.

Sellers often want a pre-approval letter with the offer, and it pairs with the earnest money as proof the buyer is serious. A buyer offering $500,000 might attach a letter for a $400,000 loan and promise a $10,000 deposit.

Pre-approval does not guarantee the loan. Underwriting, the appraisal, or a change in the buyer's finances can still sink it, which is why the financing contingency matters for protecting the deposit. Use the earnest money calculator to plan the deposit alongside your loan amount.