How to Write a Pre-Approval Letter

by Jennifer VanBaren; Updated September 26, 2017
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Lending institutions write pre-approval letters to potential customers to inform them that they are pre-approved for a loan. A pre-approval letter contains the loan pre-approval amount and typically expires after 30 days. The letter may contain details and exclusions regarding the pre-approval. This letter is not a guarantee that the loan will be approved, however. The approval of the loan is based on several factors including home value and credit history.

Step 1

Address the letter. A pre-approval letter is simply addressed “Dear” followed by the potential borrower’s name.

Step 2

Date the letter. The date must be included on the letter. Because interest rates change often, the offer should only be valid for 30 days from the date on the letter. A lender can often lock in an interest rate, but only for a short amount of time, such as 30 days.

Step 3

Describe that the person is pre-approved. A typical pre-approval letter describes that based on the person’s credit, income, assets and employment information, he is pre-approved for a loan through this particular institution.

Step 4

Explain the loan. There are many different types of loan programs available, including fixed rate loans and variable rate loans. State the type of program, the loan amount, the required down payment amount, the terms of the loan and the interest rate. Bulleted lists are often used for these pieces of information.

Step 5

Include a disclaimer. Since the letter is not a guarantee, a disclaimer must be included in a preapproval letter There are many factors to consider before a lender actually approves the loan. The loan information is processed through an underwriting department, which ensures that the information is accurate, complete and meets the required standards. This disclaimer should also state that the final approval will not be granted until after the loan application is completed and all information is verified. After the information of a potential borrower is verified, the approval is either granted or denied.

Step 6

Offer your contact information at the end. Include your business name, contact person’s name and phone number for the customer.

About the Author

Jennifer VanBaren started her professional online writing career in 2010. She taught college-level accounting, math and business classes for five years. Her writing highlights include publishing articles about music, business, gardening and home organization. She holds a Bachelor of Science in accounting and finance from St. Joseph's College in Rensselaer, Ind.

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