If you are preapproved for a loan, it means that you have gone through an extensive financial background check. This includes looking at your credit history, previous tax returns, and verifying your employment status. This also means that the lender is ready to give you a loan. When you are preapproved, the lender will give you a preapproval letter that states that you are approved for a loan. This letter is valid for 60 days after it was written.

Most sellers prefer that potential buyers are preapproved rather than prequalifed. This gives them added assurance that the deal will not fall through based on the buyer’s financial status.