What Does A Preapproval Letter Mean

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What exactly is a preapproval letter? A preapproved letter is a promotional form letter that a bank or other lender sends as a marketing tool to encourage you to apply for a loan. They typically contain a code you can enter online or a form for you to complete and send in.

Pre-approval. A pre-approval is based on the documentation the borrower supplies at the time of application, and any actual eligibility to receive the pre-approved loan depends on the terms and conditions of the pre-approval and ability to secure the loan before the pre-approval expires.

How Does an Auto Loan Pre-Approval Work?. If you’re thinking about financing a new or used car, an auto loan preapproval is an important step in the process. An auto loan preapproval is not.

A pre-approval letter is the real deal, a statement from a lender that you qualify for a specific mortgage amount based on an underwriter’s review of all of your financial information: credit.

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One of the most important steps is what’s known as pre-approval. Pre-approval will help you immensely when you’re searching for a home . It might even give you an edge on the competition once.

That said, pre-qualification is just a preliminary process, while preapproval requires a more detailed look into your finances. Again, neither preapproval nor pre-qualification guarantees that you’ll eventually qualify for the loan, but preapproval is more likely to identify problems that you aren’t aware of.

 · Pre-approval doesn’t affect your credit score, because the credit card issuer hasn’t done a hard pull on your credit report. If you decide to apply for the credit card, the credit card issuer will do a credit check that will result in a hard inquiry. The inquiry that comes from your application could hurt your credit.

Pre-Approval. A pre-approval is a lender-issued document that details the terms of a loan offer. A lending team that often consists of a loan officer, a mortgage processor and an underwriter will.

The pre-approval letter also let’s your real estate agent know what you can afford so they can find a home to fit your profile. Remember that sellers need to see that you are pre-approved, not just pre-qualified. For more help with getting your own pre-approval letter, give us a call today at 508-528-1800.