A pre-approval and a mortgage approval are not the same thing!

It’s pre-approval season as first-time buyers are starting to see some light at the end of the tunnel. So let’s bring it back to basics and make sure everyone understands that a pre-approval is NOT a mortgage.
Even though getting a pre-approval sounds like you’ve been approved for a mortgage, it’s actually very different from a full approval.
In reality, a pre-approval is really only as good as the paper it’s written on and does not guarantee you a mortgage. But it IS still very important!
A pre-approval is basically the lender giving you a preliminary nod based on an initial review of your financials—like your income, debts, and credit score. They’re saying, ‘Based on what we see so far, we think we’d lend you this much.’
This lender nod helps you shop within a realistic price range and shows sellers you’re serious when you make an offer.
But here’s the catch: a pre-approval isn’t a promise. It’s conditional, based on you maintaining your financial status quo and the property meeting the lender’s criteria upon further review. This means no major purchases or job changes that could alter your financial picture before you buy.
When you find a home and make an offer, your lender will investigate further, verifying your financial documents and assessing the property itself. They’ll check that the house is worth the price and that your finances have remained the same.
This final approval stage is when you’re actually cleared to get the mortgage. It’s the last hurdle before you can close on your home, and it’s where things can get sticky if any red flags pop up.
So remember, while a pre-approval is a helpful tool to guide your house hunting, it’s the full mortgage approval that truly gets you across the finish line!
Let’s chat about getting your pre-approval started and what steps you can take to ensure you glide through to full approval smoothly.
Craig Fried, MHA
Mortgage Agent, Level 2
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