How mortgage preapproval works and why it matters before buying a home

If you're planning to buy a home, securing a mortgage preapproval is an important first step. Preapproval gives you a clear sense of how much house you can afford based on your financial situation. It also makes you a more serious buyer in the eyes of sellers, since it means a lender has already reviewed your finances and issued preliminary approval for a home loan.

While preapproval isn't a guarantee of a mortgage, it's as close as you can get before locking it in. If you're serious about buying a home, get preapproved by your lender before you start house hunting so you can move quickly when you're ready to put in an offer. Learn more about how preapproval works.

Mortgage preapproval is a letter from a lender stating that you qualify to borrow a certain amount of money to buy a home. It's not a guarantee of a mortgage, since your circumstances could still change between the time you get preapproved and apply.

But it's as close as you can get to full approval, since the lender reviews your finances in detail before issuing a preapproval. They typically ask for documentation on your income, debt and assets, as well…

Original source: https://www.usatoday.com/money/