Putting your full faith in a mortgage pre-approval is like betting on a heavy favorite in a horse race. You’ll probably win but there’s room for major disappointment.
Sure, pre-approvals have benefits.
- The best ones accurately measure your qualifications and how much house you can afford.
- Their 90- to 120-day rate guarantees protect you if rates rocket up while you’re home hunting.
- They make you seem more serious to sellers and real estate agents. (In competitive bidding situations, they’re almost mandatory.)
- They’re free and there’s no obligation to use the lender that pre-approved you.
But here’s the problem: pre-approvals are not full approvals. So if you’re going to rely on one, you need to understand their limitations.