When Should I Get Preapproved for a Mortgage?


A preapproval letter is a document from a specific lender that shows a borrower is able to get a certain amount of money in a home loan. It does not guarantee a loan, but it does make a loan more likely and enables the borrower to show that he should be able to afford a particular house. Preapproval is a very useful qualifier to have when thinking about purchasing a home, especially in areas where competition is fierce and lenders are wary of making home loans. Getting preapproval should be one of the first steps a borrower takes.

Early Planning

The sooner a buyer can get preapproval, the better -- to an extent. When a lender grants preapproval, it is usually only for a specific time frame, such as 30 days. The buyer must make an offer, have it accepted and get the mortgage within this time period for the preapproval letter to still have value. So a buyer thinking about purchasing a home months in the future does not need preapproval; but a buyer actively looking at homes with a real estate agent does, especially when it comes time to making offers. Preapproval is for serious buyers who are ready to deal with numbers and sign offers as soon as possible.

Seeking Different Options

Preapproval can take a couple weeks in itself. Lenders must look at the credit and financial history of the buyer in order to make a decision about how much of a home loan (if any) the buyer would qualify for. This takes some time, so buyers should have all their financial information ready beforehand to give to the loan officer. The buyer can choose to pursue preapproval with only one lender or with multiple lenders at the same time. Some lending organizations may be faster than others, but they are very likely to come up with the same information.

Making an Offer

Once the buyer has the preapproval letter, it is time to make an offer. The letter becomes very important in the offer because it is what shows the seller that preapproval actually exists. The buyer should get the letter in time to make copies and give them to anyone else involved in the buying process of the property, especially the real estate agent. Agents will often advise sellers to stick with a reliable preapproved offer rather than a similar offer made without any type of approval.


There is a different between preapproval and prequalification, which many buyers miss. Prequalification is actually a step before preapproval, a document that does not guarantee any type of mortgage but gives basic limits based on a cursory look at the borrower's financial status. A preapproval is much more in-depth, taking more time but also creating a more valuable, accurate response that the buyer can use.

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