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Difference between pre-approval and getting approved for a mortage?

We got preapproved for a mortage through a lender, but my question is what exactly is the difference does that mean we may not actually get approved for one? Dont they do a credit check with the preapproval or do they check other things for the final approval?

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emilyellensmom

Asked by emilyellensmom at 8:32 AM on Jan. 20, 2011 in Money & Work

Level 8 (220 Credits)
Answers (10)
  • Pre-Approval mean that your income, credit score dictate that you can get a loan for a certain dollar amount. There is a chance you won't get approved for the actual mortgage; but usually that's because income or credit scores have changed prior to applying for the mortgage.
    Scuba

    Answer by Scuba at 8:36 AM on Jan. 20, 2011

  • It means that you meet that bank's requirements for a mortgage but if something happens between now and closing escrow, you could be denied for the actual mortgage. For example, if you bought a car or opened a credit card account or something goes into collections after you got pre-approved but before you close escrow and they actually give you the loan, you might no longer qualify for the mortgage. As long as everything stays the same, you'll get the loan.
    Braydens_Mama06

    Answer by Braydens_Mama06 at 8:52 AM on Jan. 20, 2011

  • What the other posters have said is true, but please please please keep in mind, that just because you're approved for a certain amount, does not mean that you should spend that amount! Make sure you do the math and figure out what you can actually afford to pay on a mortgage
    gumby11883

    Answer by gumby11883 at 9:23 AM on Jan. 20, 2011

  • In addition to everything the above posters said, when you get final approval they will also do an evaluation of the house. If you agreed to buy the house for $300k but the bank thinks it is only worth $250k they won't give you the loan on that house because it would be a poor risk for them. Remember that they are practically buying this house with you, and if they think it is a bad idea they won't do it.

    LoveMyDog

    Answer by LoveMyDog at 9:44 AM on Jan. 20, 2011

  • Or, it could be that you are trying to refi a manufactured home and although they never ask the question in the application, the company you are working with does not finance them. Yeah, lost $330 to find that out.
    FHA's need to pass certain expections, the appraisal needs to come in as expected, ect, ect.
    Candi1024

    Answer by Candi1024 at 10:49 AM on Jan. 20, 2011

  • Great advice from gumby11883 above. Years ago, we were approved for double what we were willing to pay and the mortgage company kept pushing that we could buy a bigger house with it but hubby and I kept telling ourselves that WE had to be comfortable with our monthly payment and realistic if something happened to either one of us/our jobs. We love the house we ended up with, are in it for the long haul, and were able to pay it off in 10 years and have been living mortgage free ever since.
    Anonymous

    Answer by Anonymous at 11:11 AM on Jan. 20, 2011

  • Read the following:


    What does Pre-Qualified Mean


    Being pre-qualified does not mean you have been pre-approved or approved for a mortgage. In fact, you're not guaranteed anything. Indeed, getting pre-qualified is a good sign -- it suggests that your financial ducks are in a row -- but your lender will want to check out your credit history, your income, your forecasted earnings, your assets, your liabilities, and your target properties.

    musicmom08

    Answer by musicmom08 at 1:17 PM on Jan. 20, 2011

  • Always make sure you have a solid lender before you start the hunt.Having your financing done before you start makes everything go smoother.Just s few steps to take so you will not have to worry about getting the property you really want.
    grismelda

    Answer by grismelda at 3:25 PM on Jan. 20, 2011

  • You can get all kinds of qualifying loans,but until you secure your backing,it can get messy.So secure a lender first,then search for the house.
    grismelda

    Answer by grismelda at 3:27 PM on Jan. 20, 2011

  • The house also has to be approved before the loan is approved. For example you're not getting a $200,000 mortgage on a home that is valued at $50,000.
    Erica_Smerica

    Answer by Erica_Smerica at 4:11 PM on Jan. 20, 2011

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