The initial approval process which a lender uses to estimate the amount that a potential borrower can be financed for based primarily on the applicant's credit. This is performed prior to the borrower's identification of a specific property. Pre-approval differs from pre-qualification, which does not require a review of the applicant's credit history.

• A lender will state a pre-approval commitment as a maximum loan amount under specific conditions and assumptions regarding the interest rate and other factors.