What Is A Mortgage Preapproval?
Preapproval is the process of determining how much money you can borrow to buy a home. To preapprove you, lenders look at your income, assets and credit score to determine what loans you could be approved for, how much you can borrow and what your interest rate might be.
How To Get Preapproved For A Mortgage?
The preapproval process is essentially a mortgage application. This means your lender will want to take a comprehensive look at your finances. You should be prepared to provide information on the following:
Before starting the preapproval process, you'll want the necessary documentation to ensure the process goes smoothly. Here are a few items you should have on hand:
Once you've submitted all your information, you can expect to receive your pre approval within 3 business days. The pre approval will let you know whether you've been preapproved and for how much.
The Mortgage Preapproval Letter
When you get preapproved, you usually get a preapproval letter. There are a few reasons the preapproval letter is important. First, real estate agents typically want to see your preapproval letter before they show you houses. This ensures they don’t waste time showing you homes outside your budget.
Second, the preapproval letter is something you can share with the home’s seller when you make an offer. It shows you won’t have problems getting financed for the amount you’re offering.
How Long Preapproval Lasts
Preapproval doesn't last forever. Check your expiration date and keep it in mind as you look at homes. Though it varies from lender to lender, preapproval is typically valid for 60 – 90 days. If you haven't settled on a house, you can request a renewal by giving your lender your most up-to-date financial and credit information.