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What’s a pre-approval?

Also known as a commitment to lend, a pre-approval is our promise to give you a loan based on certain terms and conditions. From pre-qualification to closing, we’re here to help make your mortgage process as smooth as possible. We’ve provided the answers to the five questions we get asked most about pre-approval letters, including what’s in a pre-approval letter, how long it takes to get one and when it expires.

1. What’s a pre-approval letter?

As part of the pre-approval process, you’ll be asked to provide documentation. During this level of approval, your actual documentation is sent to processing, which allows your lender to provide you with a maximum loan amount. With this, you can confidently start shopping for your home. You’ll receive pre-approval in the form of a written and signed letter. Sometimes known as a mortgage commitment letter, a pre-approval letter usually includes the following:

  • Your name and your lender’s name
  • Type of loan program, such as Conventional, FHA, USDA or VA
  • Maximum loan amount
  • Minimum down payment
  • Loan term
  • Loan interest rate
  • Total estimated monthly payment
  • Terms and conditions of the loan

2. How long does it take to get a pre-approval letter?

After gathering some basic financial information, getting pre-qualified for a mortgage only takes a few minutes. The pre-qualification level of approval is meant to help you decide if you’d like to move forward with your home loan application. Unlike pre-qualification, getting a pre-approval letter is a formal process that involves submitting supporting documents to your loan officer or applying online. The length of time that it takes to get a pre-approval letter varies.

3. Should I be concerned if my pre-approval letter is conditional?

Most loan pre-approval letters include conditions, so there’s no need to be concerned if yours does too. Common conditions include a property appraisal to assess your property’s fair market value, proof of homeowners insurance coverage and flood insurance if your property is in a flood zone.

4. What happens after I receive my pre-approval letter?

Once you have a pre-approval letter, you can shop for a house more confidently. In a competitive market, it can be valuable to show sellers that you’re pre-approved to buy.

5. When does my pre-approval letter expire?

When you receive your letter, you’ll notice it’s good for a certain period of time. Be sure to work with your real estate agent to set your closing date before your pre-approval expiration date. How long a pre-approval letter is good for depends on your situation. Your experienced Guild loan officer can clarify your pre-approval length and review what will happen if your closing date occurs too late.

Guild’s Credit Approval Protection* program can also give your bid a boost because it gives added confidence in Guild’s pre-approval process. If Guild issues a preliminary underwriting credit approval and is then unable to close on the borrower’s loan, Guild will pay the borrower up to $1,000 for inspections, appraisals and relocation expenses incurred. Guild will also reimburse the borrower for their lost earnest money deposit, up to $5,000.

From pre-approval to closing, Guild Mortgage advisors are here to guide you through your homebuying journey. Connect with an experienced loan officer today.

*For full terms and conditions, visit:

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.

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About the Author: Guild Mortgage

Founded in 1960 when the modern U.S. mortgage industry was just forming, Guild Mortgage Company is a nationally recognized independent mortgage lender providing residential mortgage products and local in-house origination and servicing. Guild’s collaborative culture and commitment to diversity and inclusion enable it to deliver a personalized experience for each customer. With more than 4,000 employees and over 250 retail branches, Guild has relationships with credit unions, community banks, and other financial institutions and services loans in 49 states and the District of Columbia. Guild’s highly trained loan professionals are experienced in government-sponsored programs such as FHA, VA, USDA, down payment assistance programs and other specialized loan programs. Guild Mortgage Company is a wholly owned subsidiary of Guild Holdings Company, whose shares of Class A common stock trade on the New York Stock Exchange under the symbol GHLD.