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Pre-approval: The homebuyer's secret weapon

Looking to stand out from the buying crowd and land the perfect home? Instantly distinguish yourself with an underwritten letter of pre-approval.

Pre-approval is a game-changer. It shows sellers you mean business. You’ve done your research, you know your budget and you’re ready to plunk down some serious cash on a brand-new home. But what exactly is pre-approval and how can it give you a leg up?

Pre-qualification vs. pre-approval

Before merging onto pre-approval road, fuel up at pre-qualification station. To get pre-qualified, a lender evaluates your debt, income and assets to give you a loan estimate for how much you’re likely to be approved. This quick procedure can guide your search and help you explore your mortgage options, but it doesn’t include an analysis of your credit report or an in-depth look at your ability to purchase a home.

For this reason, pre-qualification doesn’t carry the same gravitas as pre-approval. Your pre-qualified amount can help you determine your price range, but it’s not a sure thing. It’s simply the amount for which you might expect to be approved.

Pre-approval 101

Once you’ve dipped your toe in the water with pre-qualification, it’s time to make a splash with pre-approval. You’ll complete an official mortgage application and supply your lender with the necessary documentation to perform an extensive check on your financial background and current credit rating. At this stage, you will most likely not have found a home yet, but you can leave blank any references to “Property” on your application.

The basic formula of pre-approval remains the same from lender to lender. A lender reviews your credit report and financial information to determine your approved loan amount. Once the process is complete, your lender can disclose your specific mortgage amount. This can help you pin down your interest rate, and in some cases, you might even be able to lock in a specific rate!

Real approval*

Guaranteed Rate Affinity’s Digital Mortgage takes the pre-approval process to the next level with an automated underwriting of your loan file in minutes, not days. We call it “Real Approval.” Benefits of pre-approval with automated underwriting:

  • You narrow down your search with an accurate price range.
  • Real estate agents and sellers know you’re ready to buy—NOW.
  • You can make an offer on the spot when you find your dream home.
  • Your offer is stronger than a pre-approval with no automated underwriting.

Final approval

Keep in mind—you still need final approval to close on your home. This can happen once all the underwriter’s requests are approved and a Clear to Close (CTC) is issued.

The competition while searching for a home can be stiff. Getting pre-approved means you’re playing chess while other homebuyers are stuck playing checkers. Happy house hunting!

*“Real Approval” means an automated underwriting system approval based upon credit information supplied by applicant and subject to Guaranteed Rate Affinity’s review of loan documents. Applicant subject to credit and underwriting approval. Not all applicants will be approved for financing. Receipt of application does not represent an approval for financing or interest rate guarantee. Restrictions may apply, contact Guaranteed Rate Affinity for current rates.


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