Can I Look At A House Without Preapproval?

Cathie Ericson

4 - Minute Read

UPDATED: Jan 11, 2024

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House hunting is an exciting proposition. You’re scrolling through dream properties, visiting open houses and picturing life in your new home. You’re finally ready to talk to a lender about buying a house.

Before you call a real estate agent or start touring properties, you’re going to want to make another stop – and that’s to get preapproved for a mortgage. While it is possible to look at a house and even submit an offer without preapproval, here’s why getting preapproved is the very first step you should take when it’s time to think about buying a house.

What Is A Mortgage Preapproval Letter?

A preapproval letter is basically a “stamp of approval” that you are a buyer to take seriously. It’s a document from a lender that tells you exactly how much they are willing to offer you, getting you that much closer to having your financing lined up. A mortgage preapproval letter gives real estate agents and sellers confidence that you’re serious about making a purchase. Having your preapproval ready as you begin house hunting can help you become more successful in getting an offer accepted.

Should You Get Preapproved For A Mortgage Before Looking For A Home?

Having a preapproval letter before you begin looking for a house isn’t required, but it’s still a good idea to get your financing lined up as soon as possible. When you’re finally ready to get serious about a property, you can include that mortgage preapproval letter along with your offer, which makes the seller more likely to take you seriously.

No seller wants to accept an offer and think a sale is at hand, only to find out that the buyer doesn’t actually qualify for the mortgage and can’t close the deal. In that case, the seller would be starting back at the beginning, looking for a new buyer. That’s why sellers often reject offers that don’t come with a home loan preapproval letter, and why this is a step you shouldn’t skip.

Can You Make An Offer Before Preapproval?

You don’t need to have a preapproval letter to make an offer on a home. However, especially in a seller’s market, you are likely to have a more difficult time getting your offer accepted without a preapproval. Sellers don’t want to waste their time on a buyer that isn’t guaranteed to close the sale. A preapproval can give a seller peace of mind that you’ve done the groundwork and are prepared to follow through with the purchase.

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How To Get Preapproved For A Home Loan

The mortgage preapproval process is thorough. Lenders need important personal and financial details to decide if they’re willing to assume the risk of giving you a mortgage. The paperwork may seem daunting at first, but paperwork is part of the mortgage application process. Getting a preapproval letter means you are one step closer to making your dream of homeownership a reality.

Before you apply for a mortgage preapproval, make sure you review these steps to ensure a smooth process.

1. Plan Ahead Of Time

Most preapproval letters are valid for between 60 and 90 days. Before you start the official process, factor in the expiration date of your potential preapproval letter. That way, you can comfortably navigate the home buying process without worrying about when your preapproval expires.

2. Gather Financial Data

When you begin the preapproval process, you’ll share all your vital financial documents with the potential lender. They’ll review factors like your:

  • Credit score: Your credit score dictates loan eligibility, terms and interest rates.
  • Debts: Your debts include any outstanding loans or payments you owe.
  • Debt-to-income ratio (DTI): Your DTI indicates the percentage of income that goes toward your debt, including your new mortgage payment.

3. Shop Around

Once you’ve provided your financial data to potential lenders, consider the terms and interest rates they offer. Different lenders may require different eligibility criteria, so you’ll want to select the offer that makes the most sense for you and your family.

Of course, if something changes in your financial life, that could make a difference in whether you eventually get the mortgage. Generally speaking, a home loan preapproval is a solid estimate of the amount the mortgage lender is willing to offer you once you eventually find your ideal property.

Preapproval Vs. Prequalification

A mortgage prequalification is a less official alternative to a preapproval. The process for a prequalification is much simpler. In exchange for providing your name, income and employment status, you’ll get a budget range of how much a lender is likely to give you.

With a mortgage prequalification, the lender isn’t actually verifying any of that financial information; they’re just taking your word for it. A prequalification can give you an idea of what your budget might look like so you can search for homes in that general range.

While a prequalification can be helpful to target your search, it doesn’t carry the same weight that a mortgage preapproval does. That’s because with a mortgage preapproval, the lender has done all their due diligence to ensure that the information you’re providing is accurate. They need that inside look into your finances to feel confident enough to move forward with the preapproval letter that shows the seller that your offer is solid.

How Do I Prequalify For A Home Loan?

It’s smart to shop your mortgage around to make sure you’re getting the best deal and service available. You can compare various lenders by the interest rates they offer, the terms – such as how many years it will take to pay off your mortgage – if there are any prepayment penalties and online customer reviews.

But remember, prequalifying for a loan is not as airtight as getting a mortgage preapproval. Even though the preapproval isn’t assurance of a mortgage, pending the final review just before you sign the mortgage papers, it holds far more weight than just prequalifying. Incidentally, it’s a step that your real estate agent or REALTOR® is likely to suggest as well since they prefer to work with a buyer who is serious.

The Bottom Line

A preapproval is an unofficial letter from a mortgage lender stating that they’re willing to give you a mortgage so that you can buy a home. The preapproval letter will also note how much you are preapproved to borrow so that you can make sure you’re looking at houses within your budget. While not required, it’s good to have your preapproval before you look at houses because it shows sellers that you’re serious about buying a home.

If you’re just beginning the home buying process, apply for initial approval with Rocket Mortgage® as the first step on your home buying journey.

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Cathie Ericson

Cathie Ericson writes about personal finance, real estate, small business, education, retail/ecommerce and other topics for a host of brands and websites. Her work has been featured on major media websites, including U.S. News & World Report, Forbes, Business Insider, The Oregonian, Industry Dive, Boston Globe, CNBC, MSN.com, Realtor.com and Yahoo Finance, among many others. Find her @CathieEricson.com.