Finance
What does it mean when a buyer is 'pre-approved' for a mortgage?
AThe buyer has received an informal estimate of borrowing capacity without documentation review
BThe lender has reviewed the buyer's financial documents and issued a conditional commitment to lend a specific amount✓ Correct
CThe buyer has been approved for a specific property
DThe buyer's credit score has been checked only
Explanation
Pre-approval involves the lender reviewing the buyer's actual financial documents (pay stubs, tax returns, bank statements, credit report) and issuing a conditional commitment to lend up to a specified amount. It is more definitive than pre-qualification and stronger in the eyes of sellers.
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