What is a mortgage pre-approval?
When shopping for a mortgage, you can compare options from different lenders.
Mortgage lenders follow a specific process that could potentially help you:
- know the maximum mortgage amount you could qualify for
- estimate your mortgage payments
- lock in an interest rate for 60 to 130 days, depending on the lender
The mortgage preapproval process involves various steps called prequalification or preauthorization. Lenders assess your finances to determine the maximum amount they may lend you and at what interest rate.
They ask for personal information and documents and run a credit check. However, preapproval doesn’t guarantee a mortgage approval.