What happens after you are pre-approved

You have a letter. It is worth more than most buyers realize and less than some assume. Here is what to do with it.

Understand what the letter says

A pre-approval is a conditional commitment based on the credit, income and assets that were reviewed. It is not a loan approval — that comes after underwriting reviews a specific property and a specific contract. The conditions on it are real, and the two most common ways it changes are a change in your credit and a change in your employment.

It expires, and that is normal

Most letters run about 90 days, limited by the age of the credit report and income documents. Refreshing it is quick. If your search takes six months, expect one refresh, and do not treat it as a setback.

Use it tactically

A letter issued at your maximum tells a listing agent exactly how much room you have to negotiate. Most of the time you want the letter written at your offer price instead. Ask your loan officer to re-issue it at the number you are offering — a good one will do that on a Saturday afternoon during the showing.

Keep your file frozen

• No new credit accounts, no new financed purchases, no co-signing.
• Keep card balances where they were; utilization moves scores fast.
• Do not move money between accounts without a reason you can document.
• Tell your loan officer before any job change, even a better one.

Get your insurance shopping started early

Homeowners insurance premiums in the Carolinas vary far more between carriers than most buyers expect, and it is one of the few costs you fully control. Start quoting as soon as you are under contract rather than the week before closing.

When you go under contract

Send the executed contract to your loan officer immediately — the same hour, if possible. Appraisal ordering and title work start from it, and in North Carolina the due diligence clock is already running.