Step 16 of 48 Phase 2: Assess Your Buying Power
2.9 Pre-Approval 101
Understand the pre-approval process and why it matters.
What Pre-Approval Involves
- Credit check
- Income verification
- Asset documentation
- Employment verification
Benefits of Pre-Approval
- Know your exact budget
- Stronger negotiating position
- Faster closing process
- Shows sellers you are serious
Common Mistakes to Avoid
- Confusing pre-qualification with pre-approval - pre-qual is just an estimate, pre-approval involves actual verification
- Assuming pre-approval guarantees final loan approval - conditions can still change
- Letting your pre-approval expire (typically valid for 60-90 days) without renewing
- Not understanding that pre-approval involves a hard credit inquiry that temporarily affects your score