Pre-Approval
Real estateGlossary term
Definition
A conditional commitment from a lender stating how much you can borrow for a home, based on verified financial information. Stronger than pre-qualification and preferred by sellers.
Related terms
- MortgageA loan used to purchase real estate where the property serves as collateral. The borrower makes regular payments over a set term (typically 15-30 years) until the loan is paid off.
- Credit ScoreA numerical representation (typically 300-850) of your creditworthiness based on your credit history. Higher scores indicate lower credit risk and can lead to better loan terms.
- Down PaymentAn upfront payment made when purchasing a large item, typically expressed as a percentage of the total cost. Common for home purchases (usually 3-20%) and auto loans.
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