What is Pre-Loan Approval?

A pre-loan approval is a letter from your mortgage lender outlining the major terms and conditions of the loan you have qualified for in the purchase of a home.

The Approval Letter

Most pre-loan approval letters contain the following information:

  • The loan amount to purchase the home.
  • The type of loan you are obtaining.
  • The conditions of the pre loan approval which may include conducting a property appraisal, receiving a copy of your down payment check, as well as your most recent bank statements.  
  • A date when the letter was issued.
  • An expiration date of when the approval letter will no longer be valid.
  • Your lender’s contact information.


To obtain a pre-loan approval letter you must submit a loan application along with your financial documentation to a loan officer. If you are qualified, the loan officer will then issue a pre-loan approval letter. A pre-loan approval is important since you will know what price range you can afford when looking to buy a home. The approval is not a guarantee, since your financial situation can change in process of purchasing a home. However, a pre-loan approval will show a seller that you are a serious buyer since you have already taken the necessary steps to obtain financing. In addition, many real estate agents will not work with a buyer until they have received a pre-loan approval.