Ok, so I am pre-approved for a mortgage and everything, but if I know I have the loans?

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I sent a contract to purchase, and they told me to come back … so let me know if you want to know? Please

8 Comments
  1. Reply
    Mortgageman
    January 30, 2011 at 7:14 am

    You don’t actually get the loan until the day you close. It is going to take about 30 days. They have pre-approved you based on some preliminary information that you supplied to them. Now, they are going double check your personal information, order an appraisal, get title work and work up the final closing docs.

  2. Reply
    ChildCare
    January 30, 2011 at 7:29 am

    Pre-approved for a loan does not mean anything, it is only a piece of paper for your agent to show to the seller when you make an offer so the seller can have some idea of your financial status. Lenders will dig into more detail about your bank account, down payment, salary, job history, debt, and some calculation after you actually fill out a loan document, then they will let you know you your loan go through or got rejected.

  3. Reply
    Kitty Kat
    January 30, 2011 at 7:45 am

    No, of course not. Being preapproved means the bank will lend you the money when you make a bid.

  4. Reply
    sheldonlinker
    January 30, 2011 at 8:22 am

    Preapproval means that the information you provided (unchecked as yet) means that they’re willing to give you a loan (in the future). You bid on a house, the seller accepts. The house goes into escrow. The loan company verifies your info. Then, they fund the sale, then the house comes out of escrow, and the seller (and lienholders, if any) get their money, and you get the house.

  5. Reply
    Bash Limpbutt's Oozing Cyst©
    January 30, 2011 at 8:55 am

    No way, Jose. The amount that the bank will lend will depend upon the value of the home that you’re buying. Generally the loan is limited to between 80% and around 95% of the purchase price.

    Pre-approval just shows the maximum amount that the bank will lend you based upon a preliminary look at your income & creditworthiness.

    And you should NEVER buy at the limit of your range! That far too often results in foreclosure when you get blind-sided by an unexpected event. Keep it less than 75% of that figure. The lower the better.

  6. Reply
    potato_head30
    January 30, 2011 at 9:03 am

    No, pre approval usually confirms the maximum amount you can borrow. (Unless you applied for a certain amount for your own budget).
    If a house is less than your pre-approval, the same rules of Loan to Value Ratio will still apply.

    They will not lend you more than your house is worth.

  7. Reply
    Judy
    January 30, 2011 at 9:13 am

    No, you can just borrow a portion of the appraised value of the house. The preapproval amount just means that you qualify for a mortgage UP TO that amount.

  8. Reply
    acermill
    January 30, 2011 at 10:05 am

    No. the lender will provide an amount of money sufficient to buy the home ONLY. You won’t get one penny more from a lender than the amount which you pay for the house.

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