Preapproval is a step beyond prequalification: a conditional commitment from a lender after they've reviewed verified financial information. It typically involves a hard credit pull and is most common in mortgage and auto lending.
Why preapproval matters
Home sellers and real-estate agents take preapproved buyers more seriously because the lender has already validated the buyer's ability to borrow up to a stated amount. Auto dealers will price more aggressively when you walk in with bank preapproval rather than relying on dealer financing.
Preapproval expiration
Mortgage preapproval letters typically expire in 60–90 days because credit and income data go stale. If your search runs longer, you'll need to refresh the documentation.
Frequently asked questions
What's the difference between preapproval and prequalification?
Prequalification is a soft-pull estimate. Preapproval is a hard-pull, document-verified conditional commitment — much stronger.