Final answer:
Preapproval is when a buyer gets a promise of a loan up to a specific amount before house hunting, giving them a competitive edge in the market.
Explanation:
When a potential buyer approaches a lender prior to looking for a house, in order to obtain a promise of a loan up to a certain amount, this is known as preapproval. Preapproval gives the buyer an advantage in the competitive housing market by showing sellers that they have the financial means to close the deal.
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