Mortgage Pre-Approval: Do I Have to Stay with the First Bank?
For mortgage pre-approval it is not necessary to stay with the bank who issues your pre-approval letter, unless you want to. Pre-approval means you provided a potential lender with your earning verification and income statements in order to find out just how much house you can afford.
The potential lender has been given proof of assets and debts, and responded with a formal letter of statement showing how much they will lend. Sometimes confusion enters when people cross the terms pre-qualified with pre-approved. With pre-qualification a mortgage loan is simply an estimate. This estimate is a looser determination of how much house you can afford or money your lender will be willing to make available.
It is wise to get your pre-qualification estimates as soon as possible. When beginning a home buying process keeping your sites set on the attainable is faster and more effective all around. This is done by sitting with a lender or speaking with one on the phone. This involves no cost and no commitment.
You will need to know how big your down payment is, what debts or assets you hold, and so on. This delivers a ball-park figure to work with. This helps determine price range, can be given in what is called a pre-approval letter, but does not bind you to that lender in any way.
Mortgage pre-approval means you have a specific lender and a tentative commitment from them. They have given you a mortgage pre-approval letter showing you what they feel you will qualify for in a lending amount. You have given your documentation and it also calls for an application fee. A credit check is run by the bank, and your employment is verified along with the provided financial information.
Once approval has been awarded, you get a letter of commitment from the bank that states how much they are willing to loan you for your home purchase. This letter of pre-approval can be given to the real estate agent or seller. It shows you have your mortgage funding already in place, although this letter from the bank does not bind you to use them as the mortgage lender.
If you stick with the original mortgage and loan offer, the process is faster, although pre-approval is not a guarantee the funding will be awarded until the title search, appraisals and other home-verification checks required by the lender have been passed.
If you're ready to take the next step and get pre-approved so you can go house hunting, click the button below. At AmeriFirst, our mortgage consultants go straight for pre-approval rather than the "lighter" pre-qualification. Get started today.
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