What is a Pre-Approval?

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A pre-approval occurs with a mortgage specialist at a financial institution or with a mortgage broker, where the applicant’s credit and financial situation is analyzed to ensure that they are eligible for a mortgage. Pre-approvals are conditional on nothing changing within an individual’s credit. The classic example of a change, would be clients purchasing a car after they have received a pre-approval, only to find out on the closing date that they no longer qualify for a funds.