A pre-approval is a lender's verified read on what you can borrow. Agents treat it as proof you can close. That's why the same offer lands differently with one attached.
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The flow
You link the accounts you already use. The connection is read-only and cannot move money.
Income and assets are checked against real balances and deposit history. No documents, no credit inquiry.
Your amount, loan program and expiry date, ready to attach to an offer.
Illustration of the flow. A recording of the real product is coming.
Pre-approval in numbers
A mortgage pre-approval is a lender's written assessment of how much you can borrow. The figures behind it have been checked, not just typed into a form.
The word people trip over is "pre". It doesn't mean provisional or informal. It means the assessment happened before you found a property, so the only thing still outstanding is the house itself and the underwriting that goes with it.
Listing agents know the difference. They pick up the phone, call the number on the letter, and ask whether this buyer can actually close. A prequalification rarely survives that call.
The letter itself
Every line is something an agent might ask about. Tap one to see what it actually means.
Tap any line on the letter.
The ceiling you qualify for, not what you must show a seller. If your letter says $485,000 and you're offering $430,000, ask for it to be reissued at the offer price so you don't reveal unused room.
Conventional, FHA, VA, USDA or jumbo. Sellers sometimes weigh programs differently, particularly on properties that may struggle an appraisal.
This is the line that separates a pre-approval from a prequalification. Verified means income and assets were checked against real data, not typed into a form.
Most letters run 60 to 90 days, because income, asset and credit data goes stale. If your search runs longer, the letter is reissued with refreshed data rather than starting over.
Anything still to be satisfied. A short and shrinking condition list is a signal the file is on track. A long one gives a listing agent pause.
Who issued it and who to call. Listing agents do call, and a letter nobody answers for is worth considerably less than one that gets picked up.
The process
Four steps here. The traditional route adds a document hunt and a wait for someone to read them.
Loan purpose, property location if you have one, and the basics. Roughly a minute of typing, no account required to start.
A read-only connection to the bank accounts you already use. It confirms income and assets. It cannot move money.
Income, assets and credit position are checked against what lenders look for. This replaces manual income and asset verification, which is the part that normally takes days.
Your amount, program and expiry, ready to attach to an offer. Reissue at a different amount any time before it expires.
Walking into a showing without a letter means you can't act on the one you like.
Get pre-approved onlineRequirements
Both routes need the same proof. The difference is whether you go and fetch it.
| To verify | A traditional lender asks for | Preqly uses |
|---|---|---|
| Employment income | Two recent pay stubs, plus a verification of employment call to your employer | Deposit patterns from your connected account |
| Annual earnings | Two years of W-2s, or 1099s and tax returns if self-employed | Twelve months of transaction history |
| Assets and reserves | Two to three months of bank statements, every page | Current balances, read-only |
| Source of funds | Explanation letters for any large deposit | Visible in the transaction record |
| Credit position | A hard credit inquiry at application | No inquiry at this stage |
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Nothing about the standard changes. An underwriter sees the same evidence either way; it just arrives as data instead of paper. Documents come back into it later, once a loan officer takes over.
Qualification
Four numbers decide the figure on your letter. Learn the thresholds and you'll know roughly where you land before anyone runs anything.
Your score and the pattern beneath it. Recent missed payments weigh more than older issues you've cleared.
Monthly debt payments divided by gross monthly income. Lenders count minimum payments, not balances.
Documentable, ongoing earnings. Bonus, overtime and commission usually need a two-year history. Self-employed income is assessed on net figures after deductions.
Where the funds came from and what remains after closing costs. Gift funds need a letter confirming they aren't a loan.
Program minimums are a floor, not a promise. Lenders often add their own higher requirements, called overlays. Credit requirements by program →
Know the difference
These get used interchangeably. They aren't the same, and listing agents know it.
| Prequalification | Pre-approval | Final approval | |
|---|---|---|---|
| Based on | Figures you state yourself | Verified income and assets | Full underwriting review |
| Credit | Often a soft inquiry | None with Preqly at this stage | Hard inquiry, re-checked before closing |
| Property involved | No | No | Yes, with an appraisal |
| Typical timing | Minutes | About 90 seconds here, days elsewhere | Weeks, after an accepted offer |
| Weight with a seller | Limited | Strong | Strongest, but comes after the offer |
| Also called | Prequal | Verified approval | Clear to close |
Scroll sideways to see all columns.
Stage two is the one you carry around while you shop. It's also the only one anybody can verify.
Offer day
A pre-approval letter shows sellers you're serious and financially prepared.
Start my pre-approval
Where it sits
A pre-approval clears you. It says nothing about the house, and it isn't the last time anyone looks at your file.
The letter has done its job. Earnest money goes into escrow and the financing contingency period starts running.
This is where the credit pull happens if it hasn't already. Documents are collected at this stage even if none were needed for the letter.
The lender values the house on its own terms. A low appraisal is the most common reason a financed deal stalls, and your pre-approval does nothing to stop it.
An underwriter reviews the whole file and usually says yes with conditions attached. A short, shrinking condition list means the file is healthy.
Conditions satisfied. Credit and employment get re-checked days before closing. This is why every loan officer tells you not to buy a car or switch jobs in the meantime.
Offer day
The letter does its real work in about an hour, on the day your agent submits.
They're checking two things: is this letter real, and is this buyer serious. Verified income and assets answer both in under a minute.
Sellers weigh financing strength next to price. At the same number, verified wins. Sometimes it wins from slightly behind.
Your deposit signals commitment. The pre-approval signals ability. Sellers read the two together.
The contingency protects your deposit if financing falls through. A stronger letter can support a shorter contingency window, which sellers notice.
Get the letter once, then adjust it for each offer you write.
Start my pre-approvalAbout 90 seconds
Questions
Lenders work backward from your debt-to-income ratio. They take your gross monthly income, apply a target ratio, subtract your existing minimum debt payments, and what's left is what can go toward a housing payment including taxes and insurance. That payment is then converted into a loan amount at current rates.
No, and usually you shouldn't show it. The figure is a ceiling, not a target. If your letter says $485,000 and you're offering $430,000, ask for it to be reissued at the offer amount so the seller doesn't see your remaining room.
Yes. The usual reasons are a debt-to-income ratio above program limits, income that can't be documented, a recent bankruptcy or foreclosure still inside its waiting period, or unresolved collections and tax liens. Most of these are timing problems rather than permanent ones.
Tell your loan officer before it happens if you can. Employment is re-verified days before closing, and a change mid-process can pause or unwind the approval, particularly a move to self-employment or a different industry. A lateral move in the same field with the same or better pay is usually fine.
Yes, and comparing is sensible. If multiple lenders run hard inquiries, credit scoring models generally treat mortgage inquiries made within a short shopping window as a single event, so rate shopping doesn't stack up damage the way separate applications would.
Most run 60 to 90 days because the underlying income, asset and credit data goes stale. When it lapses you don't start over — the letter is reissued against refreshed data. More on expiry and reissuing.
Often, yes, particularly on a competitive listing. They call the number on the letter to confirm it's genuine and ask how solid the file is. That's the moment a verified letter separates itself from an estimate.
No. It's a verified qualification, not a commitment to lend. Final approval follows underwriting, an appraisal on the property, and a fresh review of your credit and employment before closing.
Keep reading
One is an estimate you typed in. The other has been verified.
Soft inquiries, hard inquiries, and when each one happens.
Program minimums, lender overlays, and what recent history does to both.
How lenders calculate it and why minimum payments matter more than balances.
Conventional, FHA, VA, USDA and jumbo side by side.
The full walkthrough, including what happens to your data.
Independent sources
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Automated assistant. Preqly is not a lender, creditor or mortgage broker. Nothing here is a commitment to lend.
