Real Estate Term
Mortgage Pre-Approval
A lender's commitment to provide financing up to a specific amount, subject to conditions.
What is Mortgage Pre-Approval?
A mortgage pre-approval is a lender's confirmation of how much you can likely borrow and at what rate, based on a review of your income, debts, and credit. It sets a realistic budget before you shop and often holds a rate for a period, protecting you if rates rise. Sellers also take offers from pre-approved buyers more seriously, since financing is more certain.
Frequently asked questions
Related terms
MortgageA loan used to purchase real estate, with the property serving as collateral.Mortgage BrokerA professional who arranges mortgages between borrowers and lenders.UnderwritingThe process a lender uses to assess the risk of providing a mortgage to a borrower.Subject to FinancingA condition in an offer that makes the sale contingent on the buyer obtaining financing.
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