Key takeaway
A preapproval follows a lender's review; it remains subject to conditions and is not final approval.
What is a mortgage preapproval?
A preapproval is a letter from a lender saying it is willing to lend you up to a certain amount, based on the income, debts, credit, and savings it reviewed. You get one by talking with a loan officer, giving basic information, and usually letting the lender check your credit. It is the first real step in buying a home in Maryland and what sellers expect with an offer. It is not a guaranteed loan offer, a final approval, or a rate lock.
Prequalification vs. preapproval: the words matter less than what was checked
The CFPB explains that lenders use the two words differently. Some issue a “prequalification” based only on what you tell them, and a “preapproval” only after they verify it; others use one word for both. Lenders may check your credit for either one, and neither is a guaranteed loan offer.
So instead of asking which word is on the letter, ask what it is based on. A letter issued after the lender looked at your credit report, pay stubs or tax returns, and bank statements carries more weight with a seller than one based on a phone conversation. Your loan officer can tell you exactly what was reviewed.
Who you call and what happens on that first call
You call a licensed mortgage loan officer. In Maryland, Paola does this at New Priority Lending Corp.; the contact form on this site simply asks her to call you back. On the call you describe the kind of home and area you are considering, your income and how you are paid, your monthly debts, and the money you have for the down payment and closing costs.
From that conversation the loan officer explains which loan types may fit, what a preapproval would require for your situation, and what could get in the way. Nothing is pulled or submitted until you say you want to move forward, and then it happens in the lender’s secure portal, not by email or text.
- You can verify any loan officer or company on NMLS Consumer Access before you share information.
- A first conversation is free and does not obligate you to apply.
- If you are not ready, ask what to work on and when to call back.
What you will be asked for
The exact list depends on how you earn and on the loan, but most preapprovals in Maryland start with the same categories. Freddie Mac’s homebuyer guidance lists income, assets, debts, and credit as the four things a lender looks at, and the documents below are how each one is shown.
You upload these into the lender’s secure portal after the loan officer sends you the link. Do not attach them to the public contact form, an ordinary email, or a text message.
| Category | Typical documents | If you are self-employed |
|---|---|---|
| Identity | Government photo ID | Same |
| Income | Recent pay stubs, W-2s, and the last two years of tax returns | Two years of personal and business returns, plus a year-to-date profit and loss |
| Assets | Two months of bank statements for the accounts you will use | Same, plus an explanation for any large deposit |
| Debts and credit | Permission to pull credit; statements for any debt not on the report | Same, including business debts you personally guarantee |
How long it takes, how long it lasts, and what can change it
With documents in hand, a preapproval can often be issued within a few days; it takes longer when income is complex or something on the credit report needs a fix. Letters carry an expiration date, commonly a few months out, because your credit, income, and savings can change. If your search runs long, the loan officer refreshes it.
A preapproval is based on a snapshot. New credit, a job change, a large unexplained deposit, or a different property type can change the amount or the loan type, which is why the loan officer will ask you to keep things steady while you shop.
- Do not open new credit cards or finance a car while you are shopping.
- Keep your down payment money where it is; moving it creates paperwork.
- Tell your loan officer before changing jobs, even for a raise.
Using the letter when you make an offer
Sellers and their agents read the preapproval as a sign that your financing is likely to close. The CFPB suggests asking a local real estate agent or housing counselor whether the letter you have will be taken seriously in your area; in most of Maryland, a lender-verified preapproval is the expected standard.
Search below your ceiling. The maximum on the letter is what the lender may lend, not what fits your monthly budget once taxes, insurance, and repairs are counted. The first-time homebuyer guide on this site explains those two numbers in detail.
What a preapproval is not
It is not a final approval: underwriting still verifies the file and the property after you have a contract. It is not a rate lock: rates are locked later, on a specific property, for a specific period. And it is not a promise that a particular loan program will be available for the house you choose.
It is, however, the point where a general idea becomes a real plan, and the moment a good loan officer becomes useful. That is why it is step two on the process guide, right after checking your own credit and budget.
Primary sources
This guide is based on the following official consumer resources. Your loan documents, your lender’s requirements, and the law that applies decide your individual situation.
- Consumer Financial Protection Bureau — Prequalification letter vs. preapproval letter
- Consumer Financial Protection Bureau — The six pieces of information that start a Loan Estimate
- Consumer Financial Protection Bureau — Preparing to shop for a mortgage
- Freddie Mac My Home — Applying for a home loan
- Freddie Mac My Home — Finding your homebuying team
- NMLS Consumer Access — Verify mortgage companies and professionals
About the author
Paola Sharleen Valdez · Mortgage Loan Officer · NMLS ID #2796757
Paola Sharleen Valdez is a Mortgage Loan Officer with New Priority Lending Corp. She writes these guides so you know what to expect, what to ask, and what you will need before you decide to start a loan with her.