A pre-approved home loan is a service provided by banks and financial institutions in which they evaluate a borrowers creditworthiness and approve a home loan application prior to the borrower selecting a property. It is determined by the borrower credit history, income, and ability to repay. A pre-approved home loan informs borrowers of their loan eligibility as well as the maximum loan amount available from the bank. It also simplifies the home-buying process because the borrower already knows how much money they can borrow and can negotiate with the seller accordingly. However, pre-approval does not guarantee a home loan, and final approval is subject to the legal and technical clearances of the property.
