Information for first time home buyers....what does it mean to get pre-approved or prequalified for a loan and how does it benefit you? Find real estate listings with our free home search and South Bay MLS access, open houses, real estate agents, and our South Bay Brokers listings. Our free real estate services feature all South Bay cities and neighborhoods including Manhattan Beach, Hermosa Beach, Redondo Beach, Torrance, El Segundo, Hollywood Riviera, Hawthorne, Hollyglen, and Palos Verdes.  
 
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Pre-Approval and Pre-Qualification 
Information for First Time Home Buyers in the South Bay
 
Is pre-approval a general endorsement by a bank?

No, when you are pre-approved, it is for a specific loan program from a specific lender. Not all lenders offer all loan programs. You may need to get approved with a different lender or for a different loan program with the same lender, depending on your financing options at the time you buy a house. Check with the agent or broker who helped you gain loan pre-approval before you write an offer. If you think you will need to get re-approved for a loan, make sure to allow enough time for this in the purchase contract.

Is the pre-qualification a guarantee that I will get the loan?

No. The lender or mortgage broker is under no obligation to grant you a loan. Most pre-qualification letters state that a buyer appears to be qualified for a certain loan amount. There is usually a disclaimer to protect the lender or broker in case you fail to qualify. Before a lender will actually loan money, you must complete a loan application.

Is there anything official about a pre-qualification?

No, loan pre-qualification is an informal process. After a review of your financial status, a loan agent or broker will issue a letter stating that if the information provided is accurate you should be able to qualify for a loan of a certain amount. Often, these letters are form letters. Even if a pre-qualification letter is personalized, it usually contains disclaimers to protect the loan agent. Consequently, some real estate agents feel that pre-qualification letters are worth little more than the paper they're written on.

 

 
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