Pre-Approval Letter

Beginner 🏠 Real Estate

Definition

A lender's statement that you're probably creditworthy enough to borrow a mortgage, pending closer scrutiny.

Example Usage

Armed with his pre-approval letter, he made offers on every open house like he was buying video games.

Origin

Mortgage banking terminology, common since the 1990s

Fun Fact

Pre-approval letters can expire or become invalid if your credit changes, turning you from buyer to spectator quickly.

Source: Mortgage lending procedures

Related Terms

Advanced

seller carry

When a property seller provides financing to the buyer, essentially acting as the bank and holding a note secured by the property. It's the real estate version of 'I'll spot you until payday'—except with six-figure stakes and actual paperwork.

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turnkey property

A property allegedly so perfect you could move in immediately with nothing but your keys and belongings. Spoiler: there's always something.

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reverse mortgage

A loan that pays elderly homeowners monthly while they live in their home, essentially converting equity to cash until they die or move. Your house paying you rent, with a hefty price tag.

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open house warrior

Someone who attends multiple open houses with no intention of buying, just enjoying free snacks and architectural tourism. They're often retired, bored, or working for a competing agent on reconnaissance.

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plans

Either a technical drawing showing how something is built or designed (especially buildings viewed from above), or a set of coordinated actions intended to achieve a goal. Real estate agents live by these; architects obsess over them.

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Intermediate

seller financing

When the property seller acts as the bank because either the buyer can't get a traditional loan or the seller wants to collect interest payments. It's basically a handshake agreement with paperwork, beloved by people who can't qualify for mortgages and sellers who enjoy playing banker.

🏠 Real Estate

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