Questions to Ask About Preapproval Letters

A preapproval letter is a powerful tool in a home search — sellers treat it as proof you can close. But not all letters are equal, and the details inside matter. Ask these questions before you rely on one.

Is this prequalification or preapproval?

Ask the lender to state plainly which one the letter represents. A preapproval should mean the lender verified your income, assets, debts, and credit — not just took your word for it. In a competitive market, sellers and their agents know the difference.

How much am I approved for — and should I use it all?

The letter states a maximum loan amount. Ask the lender to walk you through the monthly payment at that maximum, including taxes and insurance, so you understand what maxing it out actually costs. Then set your own search budget below the ceiling if the top-end payment strains your finances.

How long is the letter valid?

Most preapproval letters expire after 60 to 90 days. Ask for the exact expiration date and what re-verification involves if your search runs longer. Also ask what events would invalidate it sooner — a job change, a new large debt, or a big bank deposit can all trigger a re-review.

Is the interest rate locked?

Many preapproval letters quote an amount but not a rate. Ask whether any rate mentioned is locked, and if so, for how long and at what cost to extend. If it is floating, ask how you will be notified of the lock process once you are under contract.

What conditions remain?

Preapproval is conditional — typically on appraisal, title search, and final verification that your finances have not changed. Ask the lender to list every remaining condition so there are no surprises between offer acceptance and closing. And confirm the letter can be reissued quickly with a lower amount if you offer under your maximum; sellers prefer letters that match the offer price.