Pre-Approval means that prior to searching for a home, you have obtained a written loan commitment, subject to certain conditions. Loan approval occurs after your loan application has been underwritten. Underwriting is the formal process of reviewing your present financial status and your financial history (including credit reports, pay stubs, tax returns, employment history, etc.), within the context of established lending guidelines and credit scoring models, to determine whether you present an acceptable lending risk.
Pre-Approval differs from Pre-Qualification. As stated in yesterday’s Blog, Pre-Qualification simply establishes the amount you’re eligible to buy. On the other hand, Pre-Approval confirms you meet all requirements and satisfy lending guidelines to purchase a home up to a certain price, as evidenced by a written conditional lending commitment. Pre-Approval also means you’re essentially a cash buyer with the accompanying gravitas and bargaining power.
Post Closing
After you close make sure you prepare for your first payment. With very few exceptions, your first payment will be due the first (1st) day