and Pre-Qualification on a South Bay Loan
Is pre-approval a general endorsement by a bank?
No, when you
are pre-approved, it is for a specific loan program from a specific
lender. Not all lenders offer all loan programs. You may need to
get approved with a different lender or for a different loan program
with the same lender, depending on your financing options at the
time you buy a house. Check with the agent or broker who helped
you gain loan pre-approval before you write an offer. If you think
you will need to get re-approved for a loan, make sure to allow
enough time for this in the purchase contract.
Is the pre-qualification
a guarantee that I will get the loan?
No. The lender
or mortgage broker is under no obligation to grant you a loan. Most
pre-qualification letters state that a buyer appears to be qualified
for a certain loan amount. There is usually a disclaimer to protect
the lender or broker in case you fail to qualify. Before a lender
will actually loan money, you must complete a loan application.
anything official about a pre-qualification?
No, loan pre-qualification
is an informal process. After a review of your financial status,
a loan agent or broker will issue a letter stating that if the information
provided is accurate you should be able to qualify for a loan of
a certain amount. Often, these letters are form letters. Even if
a pre-qualification letter is personalized, it usually contains
disclaimers to protect the loan agent. Consequently, some real estate
agents feel that pre-qualification letters are worth little more
than the paper they're written on.