Mortgage fundamentals
Mortgage Preapproval: What It Means and What It Does Not
A preapproval is a conditional assessment based on the information reviewed at that time. It is not a final loan approval, a guarantee of funding, or approval of an unknown property.
What a strong preapproval should do
It should connect verified or reasonably supported income, assets, debts, credit, occupancy, price range, loan structure, and estimated property costs. Complex income or property issues should be identified as early as possible.
| Preapproval may evaluate | Still must be completed |
|---|---|
| Borrower credit, income, assets, debts, and intended occupancy | Final underwriting, updated documentation, and verification of unchanged circumstances |
| Illustrative price, payment, and cash-to-close | Exact property taxes, insurance, association costs, appraisal, title, and property eligibility |
Keep the preapproval current
- Do not open or co-sign new debt without discussing it first
- Share job, income, asset, occupancy, or household changes promptly
- Send the exact property address before relying on the estimated payment
- Update expiring documents and verify the source of funds
- Revisit the plan when rates, credits, price, or closing timing changes