Getting Pre-Approved For Home Mortgage Credit
When you are in the market to buy your first home, you may get plenty offers for pre-approval for home mortgage credit. This may sound like a win-win situation, but if you do not act fast then you may not get the amount that you desire. There are a few things that you should know about being pre-approved for a loan and actually being qualified.
When you hear the term pre-approved, you should know that it is only a conditional commitment by a lender. A lender may approve you prior to identifying your specific property or qualifications. In the case of a pre-approval, the lender verifies your information and performs a credit check. You may be saying…”Yes,” but hold on, this is only half the battle.
A pre-approval may give you an estimated monthly payment or even loan amount, but is does not specify the type of loan and the actual price. The time in between pre-approval and qualification can take some time, and in that waiting period things may change which could cause the lender to back out.
For example, you may lose your job, miss some payments on other debts, or your home mortgage credit score goes down or changes in any way. Also other factors that may effect your pre-approval can be changes in the housing market. This means if your were pre-approved for a loan and now that the market has shifted that pre-approved loan may no longer be applicable. The lender has no obligation to honor the pre-approved loan.