Quick Answer: Mortgage pre-approval is a lender's confirmation, before you've found a property, of roughly how much they're willing to lend you based on your income, expenses, and deposit - it usually takes a few days to a week, stays valid 60-90 days, and signals to agents and vendors that you're a serious, ready-to-move buyer.
Why It's More Than a Formality
Pre-approval does two jobs at once: it tells you what you can realistically afford before you fall in love with a property outside your budget, and it tells sellers and agents that your offer is backed by real lending capacity rather than a guess. In a competitive situation, an offer with pre-approval attached is taken far more seriously than one without.
What Lenders Actually Check
To assess pre-approval, lenders review your income (including any variable or self-employed income), regular expenses and existing debts, credit history, and the size of deposit you have available. They'll typically stress-test your ability to service the loan at a higher interest rate than current, to make sure you'd cope if rates rise during your term.
- Income verification (payslips, tax returns for self-employed applicants)
- Bank statements showing spending patterns and existing debt
- Credit check
- Confirmed deposit source and amount
Quick Summary
- Pre-approval sets your realistic budget before you start searching seriously.
- It signals seriousness to sellers and can strengthen your offer.
- Typically valid 60-90 days, after which it may need renewing.
- Lenders stress-test your ability to service the loan at a higher rate than current.