How much does mortgage pre-approval cost?

Something we often hear from customers is that they waited longer to get pre-approved than they needed to when starting to shop for their first home. Common misconceptions about the pre-approval process are that it costs money, hurts your credit, and/or commits you in some way to actually getting a loan with that lender. In most cases, none of those things are true.

Is pre-approval really free?

With most lenders, including Better Mortgage, yes. It’s usually in the lender’s best interest to offer you this “sneak peek” of what you might qualify for, since it both meaningfully enhances your ability to win an offer on a house and makes you more likely to proceed with that lender when you do get an offer accepted (especially if their pre-approval letter helped you get there).

One big caveat to this is that some lenders do charge an application fee in the event you continue into the full mortgage application process. Better Mortgage charges no application fee (or any hidden lender fees for that matter), and application fees are growing more and more rare — but it’s something you should consider when choosing a lender for pre-approval.

Will the mortgage pre-approval cost affect my credit?

It depends on whether the lender runs a “soft” or “hard” credit check during pre-approval. Most lenders run “hard” checks, which do show up on your credit report and negatively impact your overall credit. However, some lenders, including Better Mortgage, run a “soft” credit check, which makes no impact on your credit. Soft credit checks are very handy in cases like this, because they give lenders a fairly accurate picture of your credit and help you know where you stand earlier in the process, so that you can make some corrections if needed before fully committing to the process. This is why we encourage people who are starting to look for a home to get pre-approved on the earlier side, since it’s a valuable tool and doesn’t hurt you—so long as the lender is running a soft check and not a hard one.

Does pre-approval commit me to a loan?

No. We encourage you to get pre-approved whenever it feels most helpful to your decision-making process as you work towards purchasing a home. It can even be helpful to get pre-approved by more than one lender, to see what the differences are between lenders and offers. Was it fast or did it take a long time? Was it simple or confusing? Does the offer seem fair and compare well with what other lenders are offering? How long did it take to get your official pre-approval letter?

How does the mortgage pre-approval cost vary by lender?

While some lenders provide pre-approvals at no cost, others may include fees related to processing, applications, or third-party services like credit checks or appraisals. These costs can vary based on the lender's specific policies and may depend on the extent of the services offered during pre-approval. In certain cases, lenders might waive fees if you select them for your mortgage, making it important to ask about any potential costs upfront. Comparing pre-approval terms across lenders will give you an understanding of what to expect in terms of both expenses and benefits.

If you’re ready to get started, pre-approval with Better Mortgage takes as little as 3 minutes in our easy online application. It’s always free, and you’ll get your official pre-approval letter instantly.