A preapproval is preliminary mortgage approval. Securing a preapproval is an essential first step when you are thinking of buying a home. It provides you with a solid understanding of the loan terms and amount of loan available to you, proof of your ability to buy as an aide to negotiations and the ability to close as quickly as possible, having completed as much of the initial paperwork and process as possible.

To get pre-approved, you must submit financial documents and authorize a credit check. These documents are presented to an underwriter who reviews them and issues a written statement of loan approval. You do not need to know what property you are buying to get pre-approved.

The term pre-approved is used very casually at times (don’t get us started). Only an underwriter has the authority to issue a loan approval. Until you have made a loan application and an underwriter has reviewed it, you can only be prequalified, not pre-approved.