Pre Approval Letter Template (2025)

FAQs

What is included on a pre-approval letter responses? ›

A pre-approval letter is a document that shows a lender has reviewed your financial information and determined that you qualify for a mortgage loan up to a certain amount. This amount is based on factors such as your credit score, income, and debt-to-income ratio.

Getting a pre-qualification or pre-approval letter is generally not a guarantee that you will secure a loan from the lender. However, it may help you prove to a seller that you are able to receive financing for your purchase.

Preapproval, especially VA loan preapproval, is a step in the right direction for prospective homebuyers, but it is usually weighed down with conditions and contingencies. Simply, if you're preapproved for a mortgage there is still a possibility you could be denied after.

Getting preapproved is important because it helps you shop for a home. But your preapproval letters don't give you enough information to make a decision about which lender offers the best deal. Getting a preapproval doesn't commit you to using that lender for your loan.

Underwritten preapproval

Sellers like underwritten preapprovals even better than preapprovals. You'll submit all your financial documents just like for preapproval, but the underwriter will take a look at everything before you ever make an offer on the house.

Generally, preapproved offers, such as those from credit card issuers, don't directly impact your credit score. But once you accept the preapproval, the lender will likely review your credit history as part of a more thorough final approval process, which will result in a hard inquiry.

Maybe the house doesn't pass inspection, the appraisal comes in too low or your financial situation changed unexpectedly. Some of the steps you can take if your loan falls through during underwriting include reviewing your credit report, improving your financial situation and seeking alternative financing options.

Keep your financial situation consistent, and understand what your pre-approval is based on. This isn't the time to buy a new car, switch careers, or finance a major purchase. If your finances change, a pre-approved mortgage could be denied when you're ready to close on a home.

You do not have to have a pre-approval to make an offer on a home. You can put in your bid and a lender may consider it. However, if there are multiple buyers making offers on the home, the ones with a pre-approval tend to stand out more as it shows that they have been assessed already for approval of a loan.

Should my pre-approval letter match my offer? ›

We recommend tailoring the preapproval letter to match your offer, especially if your offer is for less than you qualify for. If the seller sees you are qualified for more, they could try to negotiate higher.

Mortgage points are essentially a form of prepaid interest you can choose to pay up front in exchange for a lower interest rate and monthly payments (a practice known as “buying down” your interest rate). In some cases, a lender will offer you the option to pay points along with your closing costs.

Additionally, your pre-approval offer could include a different maximum loan amount or interest rate than your final approval. Pre-approved mortgages will often have the greatest variation between a pre-approved offer and a final offer since mortgage loans are obtained with secured capital.

The pre-approval process requires copies of your pay stubs as proof of income, a financial background check, bank statements, down payment amount, desired mortgage amount, tax information, and so on.