Pre-approval doesn't mean what most people think it means.

Most people walk into a home search believing their pre-approval is a guarantee. The bank ran the numbers, the number came back, and now they have a budget. That's the story. It's not quite right.

A pre-approval is a conditional assessment based on your financial picture at a specific moment in time. What it doesn't account for is the property itself. When you find a house, the lender evaluates that property independently: its condition, its value, its marketability. A pre-approval at $650,000 does not mean the bank will lend you $650,000 on any house at that price. It means they'd consider it, assuming the property qualifies too.

The other piece most people miss: pre-approval conditions typically include a verification step that happens before closing. Employment gets re-confirmed. Credit gets checked again. If anything has changed (a new car loan, a job switch, a missed payment) the pre-approval can come apart. I've seen it happen two weeks before closing. It is not fun for anyone involved.

None of this is meant to scare you out of house hunting. It's meant to help you search with clear eyes. Know what your pre-approval actually guarantees (very little), know what could change it (more than you think), and talk to someone before you make an offer that locks you into timelines you can't actually meet.

Craig

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