SvetLana Cole - Full Time Licensed broker with "Charles Rutenberg Realty"
3135 Book Rd, Naperville, IL 60564
“Equal Housing Opportunity”
Pre-approval for a house purchase is a process in which a lender or financial institution evaluates a borrower's financial information and creditworthiness to determine the maximum loan amount they are willing to lend.
Pre-approval is free of charge, and usually done within 30 min by issuing a pre-approval letter to the borrower/buyer. It can be done over the phone or in person.
Pre-approval is not an approval letter and it is not a final loan commitment.
Additional checks and evaluations are typically conducted by the lender before the loan is formally approved and ready to be closed on.
To obtain pre-approval, a borrower needs to complete a pre-approval application with the lender. The application requires detailed information about the borrower's financial situation, such as income, employment history, assets, debts, and credit score.
The lender reviews this information and may also request supporting documents, such as pay stubs, bank statements, and tax returns.
The purpose of pre-approval is to give the borrower an estimate of how much they can borrow and the terms and conditions of the loan. In other words you will know the actual amount of money that you can spent on the purchase of your home.
It provides a clear understanding of their purchasing power or financial options before they begin house hunting journey.