What Is A Mortgage Pre-Approval?
August 28th, 2008 By Peter G. Miller
“Loan pre-approval” is best described as a process where a buyer sits down with a lender before entering the marketplace or buying a home to determine how much he or she can afford to borrow.
Loan pre-approval practices vary among lenders. Most pre-approvals are free, but there is sometimes a small charge. A pre-approval should include a meeting with a lender, a review of the borrower’s credit file, and the issuance of a letter from the lender saying that the buyer is generally qualified to borrow x dollars.
IMPORTANT: A loan pre-approval should not be regarded as an absolute commitment to loan money. Instead, it is typically a general guide as to what is affordable and what loan programs might best suit your needs.
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