To be pre-approved for a mortgage means that a bank or lender has investigated your credit history and determined that you would be a suitable candidate for a mortgage.
No. All a pre-approval means is that based on the information that you provided the loan officer, they believe that you would qualify for the loan. All a pre-approval is really doing is telling your realtor that you are someone who is serious about purchasing a home and ready to take the proper steps to move forward. No. Pre-approval means that with what you provided you probably can qualify. When you've found a house and make an offer, the evaluation is more rigorous. There’s not a lot of difference between a prequalification letter and a preapproval letter. While there are some legal distinctions, in practice both terms refer to a letter from a lender that says the lender is generally willing to lend to you, up to a certain amount and based on certain assumptions. This letter helps you to make an offer on a home, because it gives the seller confidence that you will be able to get financing to buy their home. It is not a guaranteed loan offer. Don’t worry about which word lenders use. Having a pre-approved loan means that you can focus on the total cost of the car when you are at the dealership. This can help you stick to your buying budget and not succumb to sales pressure to get a car that is more than you can afford. When getting pre-approved for a car loan, it pays to shop around, checking interest rates and terms before you settle on a lender. Know your credit score ahead of time and be aware that the lower your score, the higher the interest rate you’ll have to pay. What It Means. To be pre-approved for a mortgage means that a bank or lender has investigated your credit history and determined that you would be a suitable candidate for a mortgage. What It Involves. Getting pre-approved is a somewhat lengthy process. But at the end of it all you’ll know whether you can buy a home or not. The process starts before you even find a home. First, you’ll need to go to a lender and complete a mortgage application and provide documents related to your financial history. You would supply the lender with data such as your income, assets and debts and the lender would give you an idea of how much you can borrow, what type of mortgage options there are, etc. A lot of people make the mistake of thinking that pre-qualified means pre-approved, but this is not the case. What It Involves. Getting pre-approved is a somewhat lengthy process. But at the end of it all you’ll know whether you can buy a home or not. The process starts before you even find a home. First, you’ll need to go to a lender and complete a mortgage application and provide documents related to your financial history. Before you take the exciting step of looking at houses with your real estate agent, you can get a pre-approval letter -- a document showing that you already have access to a loan. This document gives you a leg up on any other buyers who may be competing against you for the same property. The first step in buying a house is shopping for a loan, which tells you how much home you can afford based on your down payment, credit rating, income and monthly payment. A lender can document your ability to pay in a pre-approval letter, which makes you a better buyer in the eyes of sellers for several reasons. Pre-approval does not mean the bank guarantees you the loan. It just means that you're approved to get loan -- unless something goes wrong. Commitment to the loan generally comes after the bank has had the house in question appraised to make sure the price you're paying isn't higher than the home's market value. Loan shopping is as intricate a process as house shopping, and the terminology is often confusing. The terms pre-qualification and pre-approval sound like the same thing, but they're not. And in fact, neither pre-qualification nor pre-approval means a bank actually has to give Pre-Qualification. A pre-qualification letter is similar to a pre-approval letter in that it lays out what buyers can afford to pay. However, it relies only on buyer statements with no independent verification. The first step in buying a house is shopping for a loan, which tells you how much home you can afford based on your down payment, credit rating, income and monthly payment. A lender can document your ability to pay in a pre-approval letter, which makes you a better buyer in the eyes of sellers for several reasons.
http://www.zillow.com/advice-thread/DO-A-PRE-APPROVAL-LETTER-MEANS-YOU-GOT-THE-LOAN/500106/ http://www.consumerfinance.gov/askcfpb/126/what-does-it-mean-to-be-preapproved-for-a-mortgage-loan.html http://budgeting.thenest.com/preapproved-mean-buying-car-24771.html http://blog.credit.com/2014/01/what-it-means-to-be-preapproved-for-a-mortgage-72882/ http://blog.credit.com/2014/01/what-it-means-to-be-preapproved-for-a-mortgage-72882/ http://budgeting.thenest.com/preapproval-letter-mean-21105.html http://www.hgtv.com/design/real-estate/understanding-the-pre-approval-process http://budgeting.thenest.com/preapproval-letter-mean-21105.html
what does a mortgage pre approval mean