Why You Need a Mortgage Pre-Approval Before House Hunting

Key Takeaways

• A mortgage pre-approval letter shows how much you can afford and makes your offer stronger.
• You can still shop other lenders later—pre-approval isn’t a final contract.
• Always ask for a clear letter that states the loan amount, type, and any conditions.

Why is it important to get a mortgage pre-approval letter?

A mortgage pre-approval letter is a written estimate from a lender showing how much they’d be willing to lend you for a house. It’s based on your income, debts, and credit score. According to NerdWallet, getting pre-approved helps you shop with confidence and makes sellers take your offer seriously. It shows you’re not just window shopping—you’re ready to buy.

What can happen if you don’t have it?

If you find the perfect house but don’t have a pre-approval letter, your offer may end up at the bottom of the pile. Many sellers (and their agents) won’t even consider offers without proof that you can actually get the money. You could lose the house to another buyer who’s already pre-approved.

Who can provide a pre-approval letter?

Banks, credit unions, mortgage lenders, and mortgage brokers can all provide pre-approval letters. According to Bankrate, it’s wise to compare a few different lenders to see who can offer you the best rates and terms.

How should you pick the lender or broker for pre-approval?

When choosing where to get pre-approved, look at interest rates, fees, and the lender’s reputation. You can use online reviews, ask your real estate agent for recommendations, and check sites like the Consumer Financial Protection Bureau for tips. Also look for lenders who respond quickly and clearly answer your questions.

Do you have to use that lender later?

Nope. A pre-approval letter is not a binding contract. You can still shop around for better deals once you have an accepted offer on a house. It’s simply proof that you’re likely to qualify for a mortgage.

What commitments are you making?

Usually none. Getting pre-approved doesn’t lock you into a loan. It’s simply an early step in the process. However, the lender will do a hard credit pull, which may lower your credit score by a few points (see Experian).

What does a good letter look like?

A solid pre-approval letter states the exact loan amount you’re approved for, the type of loan (like 30-year fixed-rate), and any conditions—like needing to verify employment. A weak letter might be vague or not mention the actual loan type, which could make sellers nervous.

Here is an example of a complete letter:

What should you ask your lender to include?

Request that your letter be clear about:

• The maximum loan amount
• The type of mortgage
• Any conditions (like additional documents needed)
• How long the letter is valid—usually 60 to 90 days

This way, the seller knows you’re a serious buyer, and you have a clear picture of your budget.

Conclusion

A mortgage pre-approval letter gives you an edge when buying a house. It shows sellers you’re serious, keeps your search realistic, and may even speed up closing. Shop around for pre-approvals just like you will for the actual mortgage to make sure you get the best deal.