Yes, underwriting can be denied even if you were pre-approved. Pre-approval generally indicates that a lender has reviewed your financial information and believes you qualify for a loan, but it is not a guarantee. During the underwriting process, lenders conduct a more thorough review, which may include:
Getting a pre-qualification or pre-approval letter is generally not a guarantee that you will secure a loan from the lender. However, it may help you prove to a seller that you are able to receive financing for your purchase.
Pre-approved loan offers do not mean that your loan application will be approved for certain. Your loan request, although "pre-approved", can be rejected by the lender if your credit score is low or if you do not meet an eligibility requirement during the verification process.
Pre-approval means you appear to be eligible for a loan based on the information you've provided and a soft credit check – but it's not a guarantee. After pre-approval you can either apply for a loan or continue to look around, the choice is yours.
A pre-approval doesn't guarantee you'll ultimately be approved for the loan, partly because the process doesn't require a deep dive into your finances. Information not found during the pre-approval process could arise during the approval process and disqualify you from getting a loan.
See loan deals and your chances of approval. Eligibility is scored as a percentage – over 70% shows a strong chance of approval. We'll also show deals where you're pre-approved.
670–740: Good credit – Borrowers are typically approved and offered good interest rates. 620–670: Acceptable credit – Borrowers are typically approved at higher interest rates.
A pre-approved card limit is the maximum amount of credit that the bank or credit card issuer has approved for you.
A mortgage pre-qualification is usually a much shorter process that requires you to honestly report your own financial information, while a mortgage pre-approval typically requires you to submit more documentation like W-2s to verify your financials — making it a lengthier process.
You may be wondering how often underwriters denies loans? According to the mortgage data firm HSH.com, about 8% of mortgage applications are denied, though denial rates vary by location and loan type. For example, FHA loans have different requirements that may make getting the loan easier than other loan types.
Credit card pre-approval doesn't typically impact your credit scores because the process usually involves a soft inquiry. Applying for a credit card that you're pre-approved for requires a hard credit inquiry, which could cause credit scores to drop temporarily.
If the amount is too low, you might not be able to buy the home you want. To raise the loan preapproval amount, you might need to increase your income, lower your debt, improve your credit or do a mix of these factors.
While loan prequalification involves undergoing a soft credit inquiry and won't harm your credit score, loan preapproval may involve a hard credit inquiry, which can temporarily lower your score.
Do pre-approved offers require a hard inquiry? No—they may involve a soft inquiry, which won't affect your credit score. If you are pre-approved for a specific card you will receive an offer.
Avoid Other Big Financial Changes
Now is not the time to switch banks. If this happens, your lender will have to delay the mortgage process so that they can gather the most current documentation from your new bank.
Requirements will vary across lenders. However, qualifying for a $10,000 personal loan typically requires a credit score that exceeds 640, an active checking account, and a steady, verifiable income, among other factors.
The average credit score in the United States is 705, based on VantageScore® data from March 2024. It's a myth that you only have one credit score. In fact, you have many credit scores, because there are many different types of credit scores and scoring models. It's a good idea to check your credit scores regularly.