Where to Get Pre-approved for a Home Loan?

A preapproved loan means that you proactively applied for a loan that was evaluated and approved before you negotiated for a house. Upon receiving a preapproved loan, you will know your mortgage limit and monthly rate, so that you can search for a home within your budget. Most preapproved home loan offers expire, though usually the offers remain valid for 60 to 90 days.

Basics

You can get preapproved for a home loan through a broker, bank or mortgage lender. Most traditional banks, local credit unions and online lenders provide preapproved mortgage services. Examples include Lendingtree.com, Quickenloans.com, Wells Fargo, Bank of America and the Philadelphia Federal Credit Union. Prepare for the application by gathering information to verify your income, such as past federal tax returns, bank statements, and proof of current income. Your preapproval will be based on factors, such as your existing debt, employment history and income. After applying for preapproval, you will be approved, approved with some conditions, delayed until additional information is received, or denied.

Pre-qualification

Mortgage lenders usually offer both prequalification and preapproval services for conventional, Federal Housing Administration (FHA), and Veterans Administration (VA) mortgages. Prequalification differs from a preapproval because a mortgage lender typically will not review a credit report when prequalifying a borrower. Thus, a preapproved loan creates better bargaining power since it is a commitment from the lender, rather than an estimate. Typically, you do not have to pay to get prequalify, however, lenders often will charge processing fees if you want to get preapproved. Make sure that you ask if the processing fees will be refunded if your application is denied.

Tips

Avoid using an unknown or disreputable lender in order to receive a realistic preapproval. Also compare offers from at least two different lenders. To improve your preapproval success, clean up and update your credit report. During the application process, you can either select or wait to select a real estate agent until after the pro-approval for help in locating homes. Since the adjudication of a pre-approval loan can take two to three weeks, selecting a real estate agent gives you more time to search for the ideal house. Remember that the preapproval amount is the maximum that the lender will give you, but not the maximum amount of loan you must obtain.

References

• Lending Tree pre-approval process
• Wells Fargo pre-approval process
• Bank of America re-approval process