A preapproval is the process in which a homebuyer may find out how much of a home loan they can get approved for with their lender. This gives buyers more flexibility when shopping around for homes to buy, because now instead of getting an approval after you've found your dream house and buying it, you'll know beforehand if that's even possible through this new mortgage-qualifying tool that many lenders offer nowadays. The process in which a homeowner may find out how much of a home loan he or she would be approved for with a lender, gives many homeowners more flexibility when shopping for their own homes. The process to determine how much of a home loan you would be approved for is called pre-approval. It allows buyers more flexibility when shopping and can make the entire house hunting experience smoother since they know that this purchase will happen sooner or later anyways.