The Pre-Approval Pre-approval is a different story. A credible pre-approval letter from a reputable lender carries a lot of weight with listing agents and sellers. They see it as a serious indicator that if they accept an offer from this buyer, the deal will go through because the buyer is very likely to qualify for the loan described in the pre-approval letter. Why? Because unlike pre-qualification, pre- approval entails a lot of verification. It’s almost as intensive as actually applying for the loan. All that’s missing
is the house itself, which will eventually act as collateral for the loan. But the borrower is thoroughly checked — income, assets, credit. Once the check is done, the lender issues a formal letter stating how much they are willing to lend to the borrower, as well as verification that the buyer can afford the down payment. If the down payment and the pre-approved loan balance are enough to buy the house, the seller can accept the pre-approved buyer’s offer with a great deal of confidence that the deal won’t fall apart in the loan-application process. Pre-approval isn’t a guarantee. Pre-approval presumes that the borrower’s financial condition will be the same at the time of approval as it is at the time of pre-approval. But life happens, and things change. The pre-approval process may take place months before closing. If the borrower loses their job, loses all their money, and/or defaults on all their bills in those intervening months, they might ultimately be declined for the loan. But if no major changes transpire in the borrower’s income, assets, or credit, nothing should stand in the way of getting approved.
Is Pre-Approval a Guarantee that My Loan Will Be Approved?
RITA REALTOR | BROKERAGE 904-555-5555 | Rita@realtor.com | www.Authorify.com
LARRY LOAN OFFICER | OFFICE 904-555-1010 | Larry@loans.com | www.Authorify.com
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