2019-09-27T11:39:26
Mortgage loan and home loan Pre-Approval process : -
Pre-approval is when a mortgage lender reviews your credit and financial situation to determine how much they are willing to lend you. Normally, you would do this before shopping for a home. The idea is to get a rough idea what you can afford, and then shop within those parameters. Later, after you've made an offer to buy a house, you would go back to the same lender for final approval. This is usually how it works, anyway.
Here's a broader explanation:
The pre-approval process will actually determine two things. First, the lender will determine if you're even qualified for a home loan. You must meet their minimum criteria for credit score, debt ratios, income, etc. If you meet these requirements, the lender will give you a maximum loan amount. They will also give you a pre-approval letter to use during the house-hunting process. We'll talk more about this letter a bit letter .
Getting pre-approved for a mortgage loan is not a guarantee. It does not obligate the lender in any way. You'll face a secondary review process later on, in order to get your final approval. There's a lot more underwriting involved with the final approval.
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