If a mortgage company online indicates that you are pre-approved for a mortgage. Does that mean you have a loan?

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I’m not sure from the pre-approved. They say I’m for real estate, then they will first seek the approval process for loans. If the money is there or not?

17 Comments
  1. Reply
    astralpen
    January 25, 2011 at 12:32 am

    Preapproved means that you are approved, typically up to some amount. Then, when you find the property they have to appraise it to make sure that it has adequate value to serve as security for the loan. If you are nervous about whether they are sincere, ask them to fax you a binding preapproval letter.

  2. Reply
    5cents_worth
    January 25, 2011 at 1:31 am

    It just means that if you apply for a mortgage loan they will approve it up the amount stated, i.e. pre-approved for $ 200,000 means they will give you a $ 200,000 mortgage if you apply.

  3. Reply
    sarahsmile
    January 25, 2011 at 2:30 am

    No that is just to real you in. They dont know for sure until they get you SS#.

  4. Reply
    peache68
    January 25, 2011 at 3:18 am

    No, it means that based on a cursory look, you may be mortgageable. The important thing to note is that the pre-approval will often come with a lower interest rate to hook you in. When applying for a mortgage you really really don’t want to have more than 2 or 3 companies check your credit report because those inquiries or “hits” will detract points from your Fico score. So make sure to get pre-approved from a reputable bank. You don’t wan to get pre-approved by some shady bank, only to find out that they will approve you at 15%, or not at all, and then you must start the documentation all over again.

  5. Reply
    Wes G
    January 25, 2011 at 3:27 am

    Pre-approval is not a full approval. I’m a realtor. I have had buyer’s loans fall through the day of closing before (3 weeks ago). I strongly recommend that you do not use an on-line lender. They are a nightmare to work with. Hire a buyer’s agent to work with you, and get a recommendation from them on an actual lender that is human. Your home buying experience will be much more smooth and painless. Good luck and happy house hunting! p.s. Hire a RE/MAX agent.

  6. Reply
    kosmoistheman
    January 25, 2011 at 3:56 am

    Prequalified or preapproved borrowers have an edge
    By Bankrate.com

    Whether you are buying a home or are refinancing your current mortgage, you eventually have to apply for a loan and compare offers. You will need to gather a lot of paperwork, satisfy a list of credit requirements, negotiate the best possible loan terms and make sense of the good-faith estimate.

    You will be asked to supply a lot of paperwork when you apply. Then you’ll get some paperwork in return. Of the documents you receive, the most important is the good-faith estimate of closing costs. The lender might shorten that to “good-faith estimate” or GFE. Here we will call it the good-faith estimate.

    Before we dive into a detailed explanation of the good-faith estimate, we will tell you about the difference between prequalification and preapproval, the questions that lenders will ask, and the questions that you should ask lenders. Near the end of this chapter we will describe what you will find in the good-faith estimate. That won’t be the final word, though. The good-faith estimate contains several categories of fees, and it will take this and the following two chapters to explain them all.

    If you already own a home and you’re looking to refinance, you can skip this chapter. If you plan to buy a home, the first step is to determine how much house you can afford, and then to start shopping for a mortgage. Your goal is to get prequalified or, better yet, preapproved. Once you have done that, you can start shopping in earnest for a home.

    By getting prequalified or preapproved for a mortgage, you will have negotiating leverage because the seller knows that you already have a loan virtually in your pocket. And you won’t be tempted to buy an unaffordable house.

    Prequalification
    Prequalification acts as a dry run of the loan application process. The mortgage lender will use details you provide about your credit, income, assets and debts to arrive at an estimate of how much mortgage you can afford. The whole process may take only minutes, or a few hours at most, and is usually free.

    While a “prequal” is nonbinding to the lender (because the information you provide has not been verified), it does serve as a good indication to potential sellers of your general creditworthiness.

    Preapproval
    Preapproval takes prequalification one step further. The lender will contact your employer, your bank and others to verify your income, assets, debts and credit history, and then issue you a letter stating that your mortgage is approved for a certain amount within a certain time. You may be charged a small fee to cover the cost of your credit reports and your application, often refunded at closing.

    Gain the buying edge
    The advantages of prequalification and preapproval are twofold: You’re more attractive to sellers, who needn’t worry that they’ll accept your offer only to have your loan turned down, and you’ll save time closing when you find a home because the lender will have already completed the necessary qualifying and underwriting steps.

    Important note: Should your financial circumstances change before closing, make sure to contact your lender, as your prequalification or preapproval may no longer be valid.

  7. Reply
    chase11209
    January 25, 2011 at 4:44 am

    That’s the procedure. Preapproval means you get the loan, assuming you can provide all the relative documents to support your initial info.
    http://www.letsgobble.com/

  8. Reply
    koifishlady
    January 25, 2011 at 4:58 am

    no, sometimes you can contact the lender and find out the amount that was preapproved. you do have to look for property and then go back to the lender and then it would be subject to approval.

  9. Reply
    Stop being a crackhead please
    January 25, 2011 at 5:46 am

    Preapproval means that you have the potential to get a loan ,however, lenders want to make sure that you are a good investment as is what you are investing in. If they see your property as a good investment they will approve your loan. Preapproval is like saying, “I trust that you’ll pay me back ,but what do you need this cash for? Is it even worth me lending it to you?”

  10. Reply
    travelguruette
    January 25, 2011 at 5:53 am

    No there is not. They do not know how much you need yet. They are guaranteeing to give you a loan.

  11. Reply
    Tracy
    January 25, 2011 at 6:07 am

    If you have provided all of the banks required documentations and they have approved you for the loan, than yes. It is usually for a certain amount only though. You would then look for a home within that price range unless you have a large savings account that you can contribute any additional $ $ $ if you choose to go with a more expensive home.

  12. Reply
    goz1111
    January 25, 2011 at 6:17 am

    in the end if the loan company does not fell the place you are buying is priced within their appraisal you do not get the loan

  13. Reply
    JESS
    January 25, 2011 at 6:54 am

    The word Pre approved means that you may be eligible to get a loan, it doesn’t mean that you are getting the loan.

  14. Reply
    Skip
    January 25, 2011 at 7:38 am

    In this particular case I think you are more or less pre-qualified for a mortgage. The reason for this is the statement you made about the look for the property first and then they will process the loan for approval.

    The only way that any mortgage broker can give you a pre-approval is they look at most of your qualifying documents.

    Some are listed below

    #1 Two years federal income taxes with the W-2s

    #2 Six months of your bank statements from the banks you are using to include any statements from your 401-k program.

    #3 One complete months of your pay stubs

    These are the minimum they would need to get from you, to include a completed mortgage loan application and run a credit check to get your credit scores.

    With the above information the mortgage broker may now submit your paper work to a underwriter. The underwriter will make a determination about your credit worthiness. If with what the underwriter have available they will issue a letter of pre-approval.

    Unless something drastically change once you find a house you will be asked to supply up to date pay stubs and other documents to complete the loan process.

    I hope this has been of some use to you, good luck.

    “FIGHT ON”

  15. Reply
    cardinalboy97
    January 25, 2011 at 7:39 am

    Nothing is ever 100 percent until after you close. But getting a committment letter from your lender is about as close as you can get. There will be terms and conditions contained in that letter (ceretain verifications must pan out, etc.), and if you comply, then you have nothing to worry about. But get the committment letter — at that point they have already pulled your tri-merged mortgage credit report and know what your credit scores are (my bank threw out my highest and lowest and went with the middle score).

  16. Reply
    Jon H
    January 25, 2011 at 8:09 am

    As a mortgage broker from Edmonton, Alberta I can tell you what happens here. We have a superheated economy and a hot, hot real estate market. What is happening here is that some sellers are not even considering offers unless there’s a pre-approval with the offer. Basically a pre-approval is a conditional approval. Providing that you meet all the conditions on the pre-approval then you will get the mortgage. One good thing here is that you can lock the rate in for up to 120 days, so if the rate goes up you get the lower rate and if the rate goes down you can get the lower rate. One thing I tell all my clients is even when they have met all the conditions, don’t go out and rack up your credit as some lenders here will pull a credit bureau before possesion to see if the buyer can still afford to purchase the home.

  17. Reply
    pattibcacl
    January 25, 2011 at 8:26 am

    Yes it does all the best on your new home good luck

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