How a Mortgage Pre-Approval Works
Pre-approval means that a lender has stated in writing that you qualify for a mortgage loan based on your current income and credit history. A pre-approval usually specifies a term, interest rate and mortgage amount. A pre-approval is typically valid for a brief period of time and usually has a number of conditions that must be met.
Once you have your pre-approval, your given interest rate can often be held between 90 and 120 days subject to all the conditions.
If the interest rate on the term chosen in your pre-approval goes up during that time, the rate you were pre-approved for is still valid if you meet all other conditions.
If the interest rate goes down during this time, you can ask to have your pre-approved interest rate adjusted to reflect the lower current rate.