Featured News 2012 Pre-Loan Approval: A Wise Idea

Pre-Loan Approval: A Wise Idea

If you want to be taken seriously as a buyer, you may want to think about getting a pre-loan approval before you ask for a mortgage. This means that you have already applied for a loan that was evaluated and approved. You can bring your pre-loan approval documents to the realtor when you go to purchase a home and show that you have already been accepted for a mortgage. When you receive your pre-approved loan, you will know your mortgage limit and monthly rate already. This means that you can search for a home that fits within that budget. Most preapproved home loans expire eventually, but you will have 60 to 90 days to find the home of your dreams while your loan is still active.

Most often you can get a preapproval from a broker, a bank, or a mortgage lender. You can also seek approval from a local credit union or an online lender. You will need to prepare for the application by gathering information to verify your tax income. This means that you will probably want to compile federal tax returns, bank statements, and a proof of your current income. The bank, broker, or other individual that you select to do your preapproval will then want to go over these items in detail and ask you about any existing debt. You may also need to talk about your employment history or talk about your income trends. Once you have finished the application process, you will be approved, approved with conditions, or delayed until additional information is received. You can also be denied for a pre-loan approval.

There is a large difference between prequalification and preapproval, so it is important to keep them separate. Mortgage lenders normally offer both prequalification and preapproval services. Prequalification is when a mortgage lender ignores your credit report. In preapproval, the lender will factor the credit report into their decision. A prequalification is merely a head nod that you are going in the right direction, while a preapproval actually shows that you have a commitment from a lender, rather than an estimate. You don’t typically have to pay to get prequalified, but you may have to shell out a bit of money to cover the processing fee on a preapproval. As if you can get a refund on the processing fee, as some banks will provide this benefit. This is especially true if your pre-loan approval is denied.

If you have an unknown or disreputable lender, then your preapproval won’t mean much. You will want to go to a reliable and notable bank or mortgage service to get the preapproval done. One real estate experts suggests that you compare offers from at least two lenders before making a decision. You might be better off if you clear up your credit score before applying if your number is not as high as it should be. The preapproval process normally takes about two to three weeks, so you might consider searching for a real estate during this time and looking at what options are available in regards to housing.

The preapproval amount that you are issued from your lender will be the maximum that he or she will give you, but probably won’t be the maximum amount of the loan that you need to obtain. If you run into legal trouble with a preapproval, or believe that you were not treated fairly in a home sale despite the fact that you had a preapproval then you may want to get a real estate attorney involved. For example, if you received a faulty preapproval from a disreputable company, then contact a real estate attorney today for help. The attorneys listed in this directory are here to help you with any real estate issues you might encounter. Get to know them today!

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