What's a Preapproval Letter?

In lending, pre-approval is the pre-qualification for a loan or mortgage of a certain value range. For a general loan a lender, via public or proprietary information, feels that a potential borrower is ...

Does a preapproval letter mean you are approved?

A preapproval is helpful when you're shopping for a home, but you'll need to get a full approval once you find your home, and simply getting a preapproval doesn't guarantee you'll get approved. For your lender, this process includes making sure the property details check out.

What does a preapproval letter include?

The Pre-Approval Letter

Pre-approval letters typically include the purchase price, loan program, interest rate, loan amount, down payment amount, expiration date, and the property address. The letter is submitted with your offer; some sellers might also request to see your bank and asset statements.