What Happens After a Home Loan Preapproval?

Preapproval can get you closer to buying a home of your own.

Preapproval can get you closer to buying a home of your own.

A preapproval letter from a mortgage lender can give you an edge when it comes time to make an offer a house. Both real estate agents and sellers are more likely to work with you if you can show them from the get-go that your financing has been tentatively approved. However, you will still have to meet all the lender’s other conditions before you can get any money.

House Hunting

RealtyTimes points out that a mortgage preapproval letter differs from a prequalification letter. Unlike prequalification, for preapproval a lender will require that you provide documented proof of your income and verification of your employment history. Once you’ve been preapproved for a mortgage loan, you can begin shopping for a home. With mortgage preapproval, you’ll know from the start how much house you can afford to buy. When you're preapproved, the lender tells you up front the amount of money you can borrow.


A preapproval letter is only valid for a specific number of days. Although the length of the period varies by lender, you generally can use the letter for up to 90 days. If you’re getting close to the expiration date but haven’t found a house to buy, it’s a good idea to talk to the lender about re-validating the letter. Since a preapproval letter shows a seller that you can get the money to buy the house, you should let the lender know if you get a new job while you’re house hunting or your income changes.

Mortgage Application Process

Bankrate.com says that because an underwriter reviews all your information during the preapproval application process, you can close on a house faster once you submit a mortgage application. A lot of the work required for the mortgage loan approval process has already been done. With preapproval, you’ve basically arranged for your mortgage financing. While you don't have to worry as much about the deal falling through at the end because of not qualifying for a home loan, preapproval in no way guarantees that the lender will give you the loan, according to The Mortgage Professor. Preapproval also doesn't obligate you to apply for a mortgage loan with that particular lender.

Home Appraisal

Once you find a home you want to buy, you’ll need to have the property appraised before the lender will give you a mortgage commitment letter. Even with a preapproval letter, your lender will want to know if the property is worth at least as much as you want to borrow. You won't get a final commitment for a mortgage loan until the lender receives a satisfactory real estate appraisal from a certified property appraiser. Once your lender gets a copy of the appraisal, it will go to the underwriter for approval. If the property appraises for the amount of the loan or more, you can breathe a sigh of relief -- that is if you’ve met all other conditions for the loan. If you have, you can set a closing date.


About the Author

Amber Keefer has more than 25 years of experience working in the fields of human services and health care administration. Writing professionally since 1997, she has written articles covering business and finance, health, fitness, parenting and senior living issues for both print and online publications. Keefer holds a B.A. from Bloomsburg University of Pennsylvania and an M.B.A. in health care management from Baker College.

Photo Credits

  • Jupiterimages/Photos.com/Getty Images