What is Being Pre-Approved / Pre-Approval?

A pre-approval on a mortgage lets a buyer know approximately how much they can expect to borrow when buying a home, therefore giving buyers a price range of homes for which to search for. A pre-approval, especially from banking institutions, also guarantees an interest rate and term for a set amount of time. In other words, a pre-approval will “lock in” an interest rate & term, to protect you from further interest rate hikes until the closing date.