What You Will Need To Get Preapproved For A Loan And What This Really Means

Are you ready to begin setting up viewings for homes for sale so you can buy one? If so, you should not begin this process until a lender gives you the go-ahead for this by telling you that you are preapproved for a loan. If you have not completed this step yet, you will need to before you shop for a home, and here are several things you should know about what getting preapproved means and how to go about doing it.

What a preapproval means

When you get preapproved from a mortgage lender, it means that the lender has reviewed all of your financial information and is saying that you qualify for a loan based on this information. When the bank preapproves you, they will send you a letter that tells you that you are preapproved, and it will include a date of expiration and an amount that is the top amount you can borrow when buying a house.

Things you will need to get preapproved

For you to get preapproved for a loan, you will have to go through a process. This process will begin by filling out a loan application, and this application will ask for a lot of different details about your finances. Secondly, you will have to give the bank financial documents to prove certain things. For example, you will have to submit tax returns to prove that you have a steady income coming in. You may need to submit bank statements to prove your income and expenses, and you may need to submit loan statements or credit card statements to show how much money you owe. Your lender will also need to review your credit file to make sure you are creditworthy.  

Your preapproval is not set in stone

The last thing to know about this is that a preapproval is not set in stone. In other words, it is not a guarantee that the lender will approve your loan when the time comes for you to need it. If your financial information changes after getting preapproved, you might no longer meet the conditions needed to get a loan. If your credit changes for the worse, you might no longer qualify either. Because of this, you must protect your credit and finances after you get your preapproval notification from the lender.

You can learn more about the preapproval process and what it involves by contacting a local home mortgage company.