The word is used for three quite different things, and lenders are not in a hurry to clarify which one they have given you.
A calculator estimate. You typed numbers into a website and it returned a figure. Nobody looked at anything. This has no standing at all and should not influence what you offer on a house.
A rate hold. A soft credit check, a few self-reported figures, and a rate locked for ninety to a hundred and twenty days. Genuinely useful, because it protects you against rate increases while you shop. But no document has been read, so the number attached to it is an assumption.
A reviewed pre-approval. Credit pulled properly, income documents collected and read, the file assessed against a specific lender's rules, and a rate held. This is the one that means something, because someone has looked for the problems.
All three get described as being pre-approved. Only the third tells you anything reliable about what will happen when you write an offer.
What the review is actually looking for
Not whether you seem creditworthy. Specific, mechanical things that stop files.
Whether you are on probation at a new job, which many lenders will not lend against. Whether your bonus, commission or overtime has a long enough history to count, and whether it will be averaged or taken at face value. Whether the account holding your down payment has ninety days of clean history behind it. Whether a support obligation reduces your income or increases your debt load. Whether a small forgotten balance in collections is sitting on your credit file.
Every one of those is fixable given notice and fatal given none. The value of a real pre-approval is finding them in week one rather than during a five-day condition period.
The number is a ceiling, not a target
A lender will tell you the maximum they would advance. That figure is calculated at the qualifying rate, which is the greater of your contract rate plus two percent or 5.25 percent, and it is deliberately conservative for the lender's benefit rather than yours.
It still does not know what your life costs. It does not know about childcare, or the car you are about to replace, or that you would like to keep saving. Plenty of people qualify for a number that would technically work and would make the next five years unpleasant.
Work out separately what payment you actually want to make, then shop below the ceiling. If your income includes overtime or commission, how lenders treat variable income will change the number materially. The qualifying page walks through the arithmetic lenders run so you can see where your ceiling comes from.
Pre-approval is about you. Approval is about the house.
This is the distinction that costs people deals, and it is worth being blunt about.
A pre-approval says the lender is comfortable with you. It says nothing about the property, because there is not one yet. Once you have an accepted offer the lender assesses the house, and the house can fail.
The appraisal can come in below the purchase price, which leaves you finding the difference in cash. A condominium can have an underfunded reserve fund, an active special assessment, or litigation, any of which can make a unit unfinanceable at some lenders. An appraiser can flag a roof at end of life or knob-and-tube wiring and the lender can hold back funds until it is repaired.
This is why you keep a financing condition on your offer. A strong pre-approval lets you shorten it, which is worth real money in a competitive negotiation. It never lets you remove it.
What can still go wrong after approval
An approval is a snapshot. Lenders commonly re-verify employment and re-pull credit shortly before funding, and files fall apart in that window with depressing regularity.
The recurring causes: changing jobs, especially into probation or self-employment. Financing a vehicle, which people do constantly when they are already in a buying frame of mind and which can single-handedly break a debt ratio. Opening a new credit card or running up existing balances. A large unexplained deposit landing in the down payment account. Co-signing a loan for somebody else.
The rule is simple: between approval and funding, change nothing, and if something must change, say so before it happens. The purchase sequence page sets out where this sits in the wider timeline.
How long it takes and how long it lasts
A day or two once documents are in hand. The bottleneck is almost always the employment letter, which employers can take a week to produce, so request it early.
The rate hold typically runs ninety to a hundred and twenty days and can often be refreshed. The rest of the approval is only as current as your circumstances. A pre-approval dated six weeks ago is worthless if you started a new job last Monday.
Doing it once, properly
Chad pulls your credit a single time and takes that report to the lender panel, so you are not accumulating enquiries at four banks. The file gets matched to lenders whose rules actually fit it, which matters most when income is variable or self-employed.
You end up with a maximum price you can rely on, a payment at that price, a held rate, and a written list of anything that would cause a problem later. Bring the items on the checklist below and that conversation produces a real number rather than an encouraging one.