Preapproval will determine the maximum you can spend on a house before you shop, so you know what price range to target. Many shoppers aim too high, bidding on a home that they later learn is beyond their means because of unforeseen debts or other financial factors. Preapproved buyers can rush the closing if the seller is in a hurry to deal plus gives buyers bargaining power.

A loan Pre-approval is generally more in depth than a loan Pre-Qualification. A Pre-Qual is a mere chat with a loan officer, whereas the loan Pre-approval process involves a more thorough investigation of the borrower's buying power. The Pre-approval process takes longer and involves actual documentations of the borrower's credit history, income and employment, bank statements, and other pertinent financial information.

People interested in buying a house can often approach a lender, who will check their credit and verify their income, and then can guarantee they would be able to get a loan up to a certain amount. The people can then take a letter of pre approval from the lender, and when shopping for a home can have possibly an advantage over others because they can show the seller that they are guaranteed to be able to buy the house.

A Pre-Approval is by far superior to merely being Pre-Qualified. Pre-qualifying is only an opinion based on unsubstantiated information provided by the borrower to the loan originator. A Pre-approval is more indepth and detailed. Normally a credit report is pulled and records of bank accounts and income, as well as W-2's are collected.

Pre-Approval
Signed or Unsigned 1003 (1003 is your Mortgage Application that you signed or the loan consultant asked you the verifiable question on the Application)
Tri-Merge Report
Financial Documents that you sent to the Loan Consultant

Once all documents are received the Loan Consultant will fax all information over to the Bank of your/his/her choice and the Underwriter of the Bank will do a quick review of the documentation received and than determine how much you will qualify for and at what interest rates you will obtain. They will than fax over a Pre-Approval with the banks name on header stating that you have been Pre-Approved from such amount and such interest rate based on the information provided. At that time as well they will also send the loan consultant a list of additional documentation for him/her to retrieve to begin the loan process. This is usually good for 30 days since rates vary monthly.

Today many lenders offer an automated pre-approval or loan commitment online through authorized brokers. This speeds up the process by allowing their computer system to analyze the borrowers credit and income details before a human underwriter actually looks at the paperwork. This method also allows loan officers to get pre-approval from a lender within 24 hours of the borrower applying for a mortgage loan.

pre approval - The pre approval is an approval from the lender stating the rate and stipulations in which they will agree to do your loan. it is the loan officers job to see that all the conditions are met in the way the lender has laid them out on this form, in order for the loan to close.

Usally this will be the first thing your realtor will ask you for.

Your mortgage pre-approval will set forth the terms in which the lender will close your loan. Typical conditions for mortgage pre-approval are no changes in income, employment or credit status, satisfactory appraisal and title as well as other conditions that are specific to your situation.

Pre-approve - Lender commits to lend to a potential borrower; commitment remains as long as the borrower still meets the qualification requirements at the time of purchase.

Most realtors will not show you a home until you have a pre-aproval from your mortgage professional. Finding a great mortgage broker should be one of your first steps in the home buying process.

Gaining pre-approval prior to looking for a home can help you to better know what you qualify for as well as giving you more leverage when making offers.