Preapproval for a loan

Getting pre-qualified for a loan is fast, free and easy task to do. Pre-qualification is an estimate of what you, the buyer can afford. Your monthly payments are deducted from your monthly income and a portion of the remainder will be used to pay a mortgage.

Being pre-approved from a lender takes longer and is a complex process. When you have been pre-approved for a loan, the lender has verified your income and assets. The lender also reviewed your credit history and past tax returns. Pre-approval is the first step in a loan application. Once you have been pre-approved, the lender will send a letter indicating the amount of money you have been approved to borrow.

A letter of approval from a lender is a powerful tool for the negotiation of the purchase price of the property. As a potential buyer pre-approved, you may be able to negotiate a lower price on your home.