Preapproval

(redirected from Preapprovals)

Preapproval

A commitment by a mortgage lender to provide a loan with a certain monthly payment to a borrower. A lender offers pre-approvals in hopes that the borrower to whom it is offered will use that lender in securing a mortgage. It should be noted that, while the monthly payment is fixed, the interest rate and therefore the total amount available to be borrowed are not. This can limit the potential borrower's options as he/she seeks to buy real estate.

Preapproval.

When you're preapproved for a mortgage, the lender guarantees in advance the maximum you can borrow, provided your financial situation doesn't change before you find a home.

You'll need to fill out a mortgage application with the lender to be pre-approved, as well as provide verification of a regular source of income and authorize a credit check. Then the lender provides a letter confirming how much you'll be able to borrow.

The preapproval process usually takes a week or two, but it may take only a few minutes if you apply for a mortgage online. Some, but not all, lenders charge a fee for preapproval.

Preapproval is not a binding commitment for either the buyer or lender, but it can give you a competitive advantage. You know in advance how much you can afford, and sellers are confident your mortgage application won't be turned down. Plus it can speed the process of closing the sale.

If you're a first-time homebuyer or you're self-employed, it may be a good idea to consider getting preapproved.

preapproval

The practice of obtaining lender approval for a mortgage loan up to a certain specified amount and then shopping for an appropriate property.

Mentioned in ?
References in periodicals archive ?
The data also include information on approximately 531,000 requests for preapprovals for home purchase loans.
This transformation is going to improve internal processing, eliminate human errors in data entry and ultimately benefit the customer in obtaining preapprovals on the spot.
Preapprovals are frequently issued within 48 hours, with closings occurring in as little as 3 weeks.
What we didn't have before, that has certainly saved time and increased the accuracy of our record-keeping, is our purchase request system, our credit card activity reporting and the preapprovals for all that," Jensen explains.
The top 25 mortgage lenders recently reported only 29,912 preapprovals resulted in mortgages used in a home purchase in 2012, according to data from the Federal Financial Institutions Examinations Council.
Banks commonly issue mortgage borrowers with preapprovals, which represent a firm commitment to provide housing finance and may be valid for up to six months.
Through this process, the bank also avoided all preapproval requirements, yet it was able to target customers more likely to qualify for a loan--to a greater degree than other methods that also avoid preapprovals, such as invitation-to-apply campaigns.
A); preapprovals that resulted in loans are included in the count of loan extensions cited earlier.
In addition, all other services, including tax services, are permissible only if preapproved by the issuer's audit committee and all such preapprovals must be disclosed in the issuer's periodic reports to the SEC.
For one thing, more managed care plans have loosened their utilization review requirements in the past few years, making it easier for patients to visit specialists without preapprovals.
For one thing, more managed care plans have loosened their utilization review requirements, making it easier for patients to visit specialists without preapprovals.
After promising 24-hour loan preapprovals along with a free loan analysis, with no cost or obligation, the site informs prospects to complete and e-mail their application.