Prospective homebuyers hear time and again about the importance of being “pre-approved” when shopping for a home. Ads in virtually all forms of media emphasize – loudly – that pre-approved buyers have more buying power while shopping and that being pre-approved gives a buyer an edge over others who have not been pre-approved for a loan.

The idea of being “pre-approved” certainly and logically leads to the concept of “approved.” But what are the differences between the two? Read on.

“Pre-approval” in a nutshell

pre-approvedSimply put, being pre-approved for a home loan means a lender has committed to providing you with home financing up to a specific amount. A lender generally will only give a buyer pre-approval after that buyer has been vetted through the following:

  • A review of the buyer’s credit report
  • Verification of the buyer’s income, including income history with current and in some cases, past employers
  •  A review of any of the buyer’s existing assets including bank accounts, investments and property
  •  An examination of any tax information, including delinquent taxes

Pre-approval, however, does not mean you’re guaranteed a loan. In most cases, a pre-approved buyer will likely qualify for a loan up to a certain amount. However, approval is not guaranteed nor are specifics such as interest rates, term of the loan, the need for private mortgage insurance and other considerations.

Still, while a pre-approval for a home loan is no guarantee, being pre-approved shows sellers you are a serious buyer and that you have passed the first major hurdle in being fully approved for a loan and purchasing a home. It also indicates that your loan will be fully approved more quickly than if you were not pre-approved.

An experienced, customer-focused loan officer from a highly-trusted lender will take the necessary steps to guide you through the process and ensure you completely understand the process.

Getting approved for a home loan; what it means

Final approval for a home loan means exactly that; you’ve been approved for a home loan for a property in a specific amount, for an agreed upon term and interest rate. In short, it means you’ve cleared the final hurdle on your way to getting that new home.

Well, almost.

For the loan to be underwritten or funded by the lender, a number of final reviews must be completed. These include:

  • An additional review of your credit report to ensure nothing has changed
  •  A final verification of your employment
  • A review of all documents associated with the transaction. These may include a final check to determine if any property taxes are delinquent, various inspection reports,
  •  For self-employed borrowers particularly, a final review of tax returns, bank records and other financial information
  • Possibly additional reviews, varying from lender to lender

You’ll also find out – to the penny – precisely how much (if any) you’ll be required to pay at closing.

This can be stressful and complex. Working with a loan officer from a customer service focused lender is of the utmost importance. 

Consult with a loan officer at

Do you need to know more about becoming pre-approved for a home loan? by Guild Mortgage has experienced agents ready to help you with all aspects of the homebuying process, including the all-important pre-approval for your home loan. We will help you review your finances and consult with you about what to expect and help you get the right home with the right loan for you.

The above information is for educational purposes only. All information, loan programs and interest rates are subject to change without notice. All loans subject to underwriter approval. Terms and conditions apply. Always consult an accountant or tax advisor for full eligibility requirements on tax deduction.