Answering Common Borrower Questions: “What Is a Pre-Approval?”

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A couple sits at a table and looks at paperwork presented by a professional man.

Your answers can inspire, educate, and empower borrowers.

For many borrowers, a pre-approval might seem a lot more intense than it actually is. After all, the average client may not know that they can typically be pre-approved even with low credit, that a pre-approval letter doesn’t lock them in with one specific lender, or even what makes a pre-approval different than a pre-qualification.


That’s where you come in!


While you spend your days financing dream homes and know all the acronyms like the back of your hand, the average American faces startlingly low levels of financial literacy.


That’s why common borrower questions are so much more than just general wonderings. There are hopes, dreams, and emotions tied to them.


Plus, each one offers stellar mortgage loan originators (MLOs) an opportunity to impart wisdom, encourage their clients, and overall promote home finance education.


So, let’s dive into some of the most common borrower questions surrounding pre-approvals and their comprehensive answers:

“What Is Pre-Approval and Why Is It Important?”

Of course, as a MLO, pre-approvals are your bread and butter. Many of your clients probably won’t be quite as familiar, though. Especially if they’ve also heard the term ‘pre-qualification’ thrown around…


Explain that pre-approval is a critical step in the homebuying process and be sure to touch on how it can help clarify a realistic budget and strengthen their position in a competitive market.


Basically, it comes down to the fact that you know how valuable pre-approval is. To answer this question effectively, you simply need to share that sentiment.

“How Does Pre-Approval Differ from Pre-Qualification?”

As mentioned, a portion of your borrowers are sure to be at least a little bit confused about the differences between pre-approval and pre-qualification. It doesn’t help that some media outlets, homeowners, and even professionals may use these terms interchangeably.


Sit down with clients to go over the similarities and differences in-depth. It may help if you clarify the timing, cost, and benefits of each.


Investopedia offers a comprehensive article complete with straightforward graphics if you’d like to send them home with something to study.

“How Do I Get Pre-Approved for a Mortgage?”

Once borrowers have a grasp on the “what” and the “why”, it’s time to move on to the “how”.


Stand-out MLOs can educate and empower their clients through financial growth and understanding. As per usual, list out all the documents and files the client will need. Then, you have an opportunity to go above and beyond.


Take some time to thoroughly explain how each piece of the puzzle comes together for the pre-approval. Clarify the reasoning behind the projected timeline, how and why one single error could spell trouble, and leave plenty of time for questions.


Remember, while they certainly could just drop the paperwork with you and wait, this is a key opportunity to build financial literacy and understanding.

“Can I Get Pre-Approved with Less-Than-Perfect Credit?”

This is a very brave question for borrowers to ask, so you’ll want to be empathetic in your answer.


Consider a two-pronged approach. In cases like this, you can:

  • Explain that, yes, borrowers with less-than-perfect credit can typically still be pre-approved. Dive into the drawbacks, though. Explain the differences between favorable and unfavorable loan terms, perhaps even running some sample numbers to illustrate cost.
  • Offer guidance or advice on improving credit scores before the pre-approval process. Depending on the borrower’s degree of knowledge, this might include clarifying the highest impact factors, connecting them with a credit coach or other professional, or simply providing some emotional support.


Essentially, just don’t forget that part of your role includes exercising empathy. After all, borrowers with low credit may be feeling regretful, self-conscious, or anxious, even pre-pre-approval.

“How Long Does a Pre-Approval Last, and Can It Be Renewed?”

As you’re aware, some buyers just aren’t ready to move as soon as the pre-approval comes through. That may be increasingly true as nationwide demand and days on the market continue to stabilize.


Share the usual information, like the fact that pre-approvals typically have a specific duration, often up to 90 days. Then, make a point to schedule specific touchpoints so you can regularly check back in with the client.


The fact is life happens. It’s not uncommon for a client to practically blink and be outside those allowed 90 days. MLOs who are proactive and persistent in checking in will certainly stand out in this regard.

“Can I Switch Lenders After Getting Pre-Approved?”

Ah, the old switcheroo! Remember that, while you’re working day-in and day-out in-home financing, all of this is brand new to many borrowers. A home is likely the largest purchase they will ever make, so a case of cold feet isn’t exactly unheard of.


To mitigate the risk of multiple pre-approvals, clarify up-front that a pre-approval letter doesn’t lock the borrower in with any one lender. Knowing this information right out of the gate might help the client feel more at ease and less caged in. It also doesn’t hurt to reiterate that the two of you will work together to find the right lender, one that best aligns with their budget, goals, and needs.


Don’t forget a heads up, though, that if they get swept up in the process and there are changes last minute, there is the potential for a deal to fall through or become significantly delayed. Clarify that it’s certainly possible to switch lenders after getting pre-approved but, in some cases, may not align with their timeline or ideal outcome.

Pre-Approval: Everything Your Borrowers Need to Know

So, there you have it: Some of the most common borrower questions relating to pre-approval, their comprehensive answers, and a few opportunities for you to go above and beyond.


Now, are you ready to repeat this process with about fifty more mortgage terms? Your future clients will thank you!


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