Mortgage Glossary

Pre Approval

Also called: preapproval, pre-approval, approval letter, approved for a mortgage

Definition

A lender's written statement of how much you can likely borrow after reviewing your credit, income and assets. It is based on documentation, not just a conversation.

Why it matters

Most sellers in Northeast Ohio expect a pre approval letter with an offer, and a fully documented review is far less likely to fall apart later.

Example

You send pay stubs, W 2s and bank statements. The lender pulls credit and issues a letter for a purchase price up to $325,000 with 5% down.

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Related terms

Pre Qualification: An early estimate of what you may be able to borrow, usually based on information you state rather than documents the lender has verified.
Underwriting: The lender's review of credit, income, assets and the property to confirm the loan meets program guidelines.
Clear to Close: Underwriting has signed off on the file and the lender is ready to prepare closing documents.

Written by

Manny Oloyede, Mortgage Broker

NMLS #1824463 | Ultimate Mortgage Brokers LLC NMLS #2619461 | Licensed in OH | KY | NC | PA | SC | TN | TX

I have worked in mortgage lending since 2018 out of the Akron / Cuyahoga Falls Branch, helping buyers, homeowners and investors across Northeast Ohio and every state where I am licensed. These guides reflect the questions I answer most often, written the way I would explain them on a call.

Want this applied to your actual numbers?

Definitions are the easy part. What matters is how the guideline reads against your income, credit and property.

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