Be prepared to answer lender questions as soon as they come up. Getting preapproved is a smart step to take when you are ready to put in an offer on a home. Aside from their distinct roles in homebuying, prequalification and preapproval can take different amounts of time.
Prequalifying at Bank of America is a quick process that can be done online, and you may get results within an hour. First-time homebuyers are more likely to find that getting prequalified is helpful, especially when they are establishing their homebuying budget and want an idea of how much they might be able to borrow.
Preapproval can be extremely valuable when it comes time to make an offer on a house, especially in a competitive market where you might want to stand out among other potential buyers. Again, a seller will be more likely to consider you a serious buyer because you have had your finances and creditworthiness verified.
Ready to prequalify, get preapproved or apply? Get started with the Digital Mortgage Experience. How loans are approved. Today's mortgage rates. Calculate your monthly mortgage payment. Explore current rates and other financing options on our mortgage home page. As you look for a home, you may be asked to get prequalified or preapproved. This can be completed easily and conveniently online, in person, or over the phone in just a few minutes with basic information like your income and expected down payment.
When you want to give yourself a competitive edge over other buyers in the market, you can get preapproved. Having a preapproval lets sellers know that you already qualify for the home financing which greatly increases your chance of having your offer selected. Unlike prequalification, preapproval is a more specific estimate of what you could borrow from your lender and requires documents such as your W2, recent pay stubs, bank statements and tax returns.
The lender will then use these documents to determine exactly how much you can be preapproved to borrow. Then you can lock your rate and complete your application. Monday to Friday 8 a. Get Pre-Approved Keep in mind that not all loan products are available through Credible.
To get an idea of your financial situation and determine if you meet all the requirements, a loan officer will comb through several pre-approval documents , including:. Credible offers a streamlined pre-approval process that allows you to secure a pre-approval letter from multiple lenders at once. Rather than waiting several days, you can find out how much you qualify for in a matter of minutes.
Our process is entirely online and user-friendly, and you can quickly generate letters for sellers and your real estate agent directly from your account. Ready to get pre-approved through Credible? Generate a pre-approval letter instantly Start Now. A mortgage pre-approval typically lasts between 60 and 90 days. The expiration date for your pre-approval should be indicated somewhere on your pre-approval letter. You can find this date on the first page of your Credible pre-approval letter. Not only will a pre-approval inform you of the mortgage loan you qualify for, it also gives you an advantage over other buyers and makes the entire homebuying process a lot less stressful.
Advertiser Disclosure. A prequalification essentially states that you will qualify for a mortgage but might not give an accurate representation of how much you will be approved for or what your interest rate will be.
Without your report, a lender can only estimate what you will be approved for. Once approved, your lender will give you a preapproval letter, which lists out your mortgage amount, interest rate and additional details of the loan. The letter is vital for a few reasons. First, real estate agents usually ask to see your preapproval letter before they show you houses. Knowing that you are preapproved will help your agent understand your budget and assure them that you are serious about purchasing a home.
Second, a preapproval letter is something you can share with the seller to prove that your offer is legitimate. Typically, the lender will then run a check on your credit history and ask you a series of questions about your financial standing and the home you want to buy.
Once you choose a mortgage lender to work with, the whole process can take as little as a few minutes over the phone. Be sure to have your Social Security number and other necessary information handy so that they can quickly run a credit check.
The time a mortgage preapproval is valid before expiring can vary depending on your lender. In most cases, it lasts for around 60 to 90 days. For example, upon their first preapproval, they may have learned that they have a low credit score.
If they lower their debt-to-income ratio and take other steps toward increasing their score, the borrower could receive a lower rate on their next mortgage preapproval.
Alternatively, credit scores could go down, debt could increase or some other impact on their ability to make mortgage payments, affecting their likelihood of moving forward in the loan process. In that case, they may receive a higher interest rate or smaller loan amount for their preapproval.
Or, possibly not qualify at all if the negative changes are impactful. They will still need to get a new preapproval letter. While you can get multiple preapproval letters, it can be harmful to your credit score. Since lenders run a credit check to make a letter, it creates a hard inquiry on your credit report. A hard inquiry can decrease your credit score by several points, and too many inquiries can be a red flag to future lenders.
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