Consumer Comeback Blog

Credit Score Glossary: Pre-Approval

Pre-Approval: Assurance that a person will be able to receive a loan up to a certain amount.

When referring to mortgages, pre-approval usually comes after a potential borrower completes a mortgage application and the lender performs an extensive financial background check. Then the lender will be able to tell the borrower the specific mortgage amount for which he or she is approved. With this pre-approval, borrowers can get a conditional commitment for an exact loan amount, and begin looking for a home in that price point.