What a Pre-Approval Means When Applying for a Mortgage Loan

You’ve been dreaming of your house since you were a kid, and here you are, almost ready to buy it. So you apply for a mortgage, and you get good news: you have been pre-approved. But what exactly does this mean, and how do you move forward from this?

What Does It Mean to Be Pre-Approved for a Mortgage?

When you are pre-approved for a mortgage, your lender is telling you that you have been approved for a mortgage for a certain amount. Because the lender has gone through your financials and assets and determined that you are a good candidate for the mortgage loan, you can move forward with the process of buying the home.

How Do I Apply for Pre-Approval?

At the beginning of the process, you will likely have to fill out a pre-qualification form. The information you provide on this form will be reviewed by your lender and used to determine if you are a good candidate for a mortgage.

If you already own a home, your lender will likely run a credit check, just a credit score and financial checks that include checking your employment history and income.

If you do not own a home, the lender may also require you to show how you will pay for the home. This is called a down payment. Once you meet the pre-qualification criteria, you will be considered pre-approved.

Can the Lender Pull Out after Pre-Approval?

Once you are pre-approved, you can purchase the home, but a lender can always rescind the pre-approval. The lender is likely to run your credit again to determine if your financial situation has changed. If your circumstances have changed, they can reject you, and they are not required to explain why.

If you were pre-approved and have not gone to the closing table, you may have to re-qualify for the mortgage loan. This involves submitting updated financial documents, so it is important that you keep the lender informed about any changes to your finances.

What Happens After I Have Been Pre-Approved?

After you have been pre-approved, you can begin looking for a house. Once you find a house you want to purchase, it’s time to close.

This involves submitting a purchase proposal to the seller’s agent. You will also submit the Purchase Agreement and other documents related to the purchase to your lender for review.

The lender may approve the request for financing, but there is a chance that you may need to submit additional financial documents or financial checks. If the lender approves the mortgage, your purchase contract will close. If the lender asks for additional documents, the contract will not close, but you can submit the additional documents needed, then the purchase will close.

Make sure to submit all the necessary documents and be truthful in your application. Remember, despite pre-approval, the lender may still deny you a mortgage if they find your documents insufficient or if you seem to be incapable of paying back the loan.


Pre-approval is an important step in the mortgage process, but like anything involving real estate, there are many factors that can affect it. Make sure that you understand the mortgage process before you begin the process. Be able to submit all the documents and be truthful in your application, and you should have no problem getting pre-approval.

If you are a first-time homebuyer in Southern California, you can reach out to us at Century City Realtors. We handle all types of real estate transactions to ensure that you get the best you can. Get in touch with us to learn more.

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