If you are interested in buying a house, you will need to prepare for it by getting preapproved for a loan from a mortgage lender. When you do this, you will receive a letter that states that you are preapproved, and it is highly important to know the following three things about this mortgage preapproval.
It is not a guarantee that the lender will give you a loan
The first thing you must understand about getting a mortgage preapproval letter is that it is not a 100% guarantee that you will get a loan when you are ready for one. It is simply a letter that states that you meet the criteria for a loan and that the chances of the lender approving you are very good. However, it does not necessarily mean that you will be able to get the loan when you start closing on a house you want to buy.
It is not good forever
The second thing to understand is that you cannot simply hold onto a preapproval letter forever and expect it to be good forever. A preapproval is only good for a certain amount of time, and this amount of time will be stated on the letter. The letter will either state an expiration date of the preapproval, or it will state that it is good for a certain amount of time from the date on the letter. If you wait too long to find a house to buy, you may need to go through the entire preapproval process again. In most cases, preapprovals are good for around three months.
Your approval will also depend on the house you choose
The other thing you must realize about this is that the approval of a loan will depend a lot on the house you choose. If you try to buy a house that is worth less than the amount you are paying, for example, the lender might not approve the loan. Also, if there are any issues with the title of the house, the lender might back out of offering you the loan. To turn a preapproval into an approval, everything must check out. This includes everything about the house and everything about your financial situation.
Knowing these three things is vital as you begin shopping for a home. If you would like to get preapproved or learn more about the process, contact a mortgage broker service today.