How fast can you get pre-approval?


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A mortgage preapproval is a letter from a lender saying that its tentatively willing to lend you a specific amount for a house.

Getting preapproved for a mortgage is a crucial first step in the home-purchase process. Sellers often want to see a preapproval letter before accepting your offer on their home.

Fortunately, the process of applying for preapproval is relatively quick and simple. Lets explore what you need to do and how a mortgage preapproval can benefit you during the home-buying process.

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  • What is a mortgage preapproval?
    • How long does it take to get preapproved for a mortgage?
    • Whats the difference between mortgage preapproval and mortgage prequalification?
    • Is mortgage preapproval worth it?
  • How to get preapproved for a mortgage
    • Gather the appropriate documents
    • Get quotes from different mortgage lenders
    • Dont get preapproved too far in advance
    • Choose a lender

What is a mortgage preapproval?

Mortgage preapproval is a lenders conditional approval for a home loan in the form of a preapproval letter. It lets home sellers know that you will likely be approved for a certain amount of financing, based on the information you provided in your preapproval application. Keep in mind that preapproval is not a guarantee that youll be approved for the mortgage, and the terms youre offered may change after you submit a complete, formal mortgage application.

How long does it take to get preapproved for a mortgage?

How long it takes to get preapproved can vary by lender. It could take as little as a few minutes to get a basic preapproval to 24 hours or 10 days or more. If youre in a time crunch, make sure you find out how long the preapproval process takes with each of the lenders youre considering.

Whats the difference between mortgage preapproval and mortgage prequalification?

The main difference is the level of scrutiny with which your information is examined. A prequalification is issued without verification of income, employment history, assets, etc. It assumes the information you gave is accurate. But a preapproval is issued only after the lender verifies the info you provide.

Is mortgage preapproval worth it?

Mortgage preapproval comes with several benefits. First, it gives you an idea of how much you can borrow, which will help narrow down your search to houses in your price range. But remember that just because youve been preapproved for an amount doesnt mean you have to borrow the maximum. In many cases, its probably a good idea that you dont. Thats because many mortgage lenders use your gross monthly income (versus net monthly income) as a factor in determining how much you qualify for.

Your lender generally doesnt consider your daily living expenses things like groceries, utilities, childcare, healthcare or entertainment or monthly debts in its calculations. Its up to you to reviewyour budgetto make sure youre comfortable with the loan amount. Dont rely on your lender to tell you what you can afford.

The preapproval process could also uncover potential issues that would prevent you from getting a mortgage, so you can work them out before setting your heart on a house.

Lastly, a mortgage preapproval lets sellers know you have the borrowing power to back up an offer you make to buy their home, which could make your offer more competitive. It tells real estate agents, who typically work on commission, that spending time on you could well pay off with a transaction. And it alerts lenders that youre a savvy borrower who may soon be taking out a mortgage loan.

In short, getting preapproved for a mortgage signals that youre a serious buyer.

How to get preapproved for a mortgage

Applying for preapproval for a mortgage is a straightforward process that requires some paperwork and, in many cases, just a few days for the lender to verify your personal and financial information. Each lenders process is different, but theyll generally review your credit history, income, assets and debts before deciding to grant a preapproval and, if so, for what amount.

Gather the appropriate documents

Lenders will want to verify your identity, credit history, employment history, income and financial assets to issue a preapproval. Theyll likely ask you to fill out a uniform residential loan application (almost everyone calls it a 1003 or ten-oh-three heres anexample).

The 1003 application asks for your personal information, financial information and loan information, including

  • Bank accounts, retirement and other accounts
  • Any other assets you have
  • Property you own
  • Income and employment details
  • Employer contact information
  • Debts you owe or other liabilities

Your lender will also likely do ahard credit check, and may require additional documents based on your individual situation, such as pay stubs, tax returns or bank statements.

Get quotes from different mortgage lenders

Just as you want to get the best deal on the house you buy, you also want to get the best deal on your home loan.

Every lender has different guidelines and interest rate options, which can have a big effect on your monthly payments. If you only get preapproved with one lender, youre stuck with what it has to offer. When you get preapproved with multiple lenders, you can choose the offer thats best for you. Many lenders offer the ability to apply for preapproval, including Bank of America, Better Mortgage and Rocket Mortgage.

Its important to do your homework before choosing potential lenders. You should research each lender and even the loan officer who would be handling your mortgage there can be a big difference in knowledge and experience depending on who processes your application.

After you choose some lenders, youll provide the information needed to complete the preapproval application process. An underwriter may examine your preapproval application to determine how much you can borrow. If an underwriter hasnt reviewed your application, you havent been fully preapproved so be sure to ask about the status of your application during the process.

Once the lender has all the documents it needs, it typically only takes a few days for the lender to let you know whether youre preapproved and how much youve been approved for. But the preapproval process can take longer if you have a past foreclosure, bankruptcy, IRS lien or poor credit.

If youre shopping for a mortgage, you have a window of time where multiple credit inquiries by lenders are counted as a single inquiry for your credit scores. The window is typically 14 days though it could be longer.

Since its difficult to know which credit-scoring model a lender will use, youll likely want to get all those rate quotes within 14 days.

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Dont get preapproved too far in advance

When you receive your preapproval letter, itll probably say its good for 30 to 90 days. Since thats a relatively short period, youll probably want to wait to get preapproval letters until youre ready to start seriously shopping for a home. And remember, a preapproval is only a conditional approval. If you rack up more debt, change jobs or reduce your savings, you could get denied when you go to get final mortgage approval.

Choose a lender

Once you make an offer on a house, its time to get official loan estimates from your list of potential lenders. After you apply for a mortgage, the lender must provide this estimate within three business days of receiving your application. The document will include estimates for your interest rate, monthly payment, closing costs, taxes and insurance, as well as details on how the loan works, such as any penalty fees. After you review and compare the estimates, you can choose the lender that best meets your needs and work with it to complete your application.

Tip: To get a general idea of mortgage rates where you live, check out the map below.

Mortgage rates where you live

Mortgage or refinance rates depend on different factors, including where you live. To better understand what rates you may qualify for, including what the average mortgage or refinance rate is in your area, take a look at Credit Karmas mortgage rate marketplace and our latest state-specific guides.

Whats next?

Getting preapproved for a mortgage provides many benefits to potential home buyers.

If you arent able to get preapproved, you can start working on whatever the issues are. That may mean paying down debt to improve yourdebt-to-income ratio, saving for alarger down paymentor resolving inaccuracies on your credit reports. Whatever the case, if you go through the preapproval process, youll be made aware of the issue and can address it before you begin your home search. If not, you could be in for an unpleasant surprise when you make an offer on a home.

Doing this work upfront can pay off getting that mortgage preapproval letter in hand can help you stand out from the home-buying crowd.

How much house can I afford? Estimate Now

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