An evaluation of a potential borrower by a lender that determines whether the borrower qualifies for a loan from the lender, or the maximum amount that the lender would be willing to lend. The pre-approval process involves a thorough look into the income and expenses of the borrower, including a look at the borrower's credit report and score.

Investopedia Says:
The pre-approval process involves a confirmation of income and a credit check on the borrower. As long as no major income or credit changes occur between the time of pre-approval and the actual purchase of a home, the dollar amount of pre-approval can be expected to remain the same. The process may take anywhere from a few minutes (for an online lending application) to a couple of weeks. A nonrefundable fee may be charged for the process.

A pre-approved mortgage is still subject to review once a specific property has been chosen, so the dollar amount is not guaranteed. A pre-approval may be lowered or even revoked if the property in question may be difficult to resell in the real estate market due to preconditions, location and other factors.  

Related Links:
These terms may sound the same, but they mean very different things for home buyers. Pre-Qualified Vs. Pre-Approved - What's The Difference?
These errors could wind up costing you more than the coveted key to your first home. 10 Worst First-Time Homebuyer Mistakes
Answering this means number-crunching as well as factoring in other considerations and expenses. Mortgages: How Much Can You Afford?
It starts with knowing your choices as well as your price range. We show you how to get there. 4 Steps To Attaining A Mortgage
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