What does preapproval of a home loan really mean?
Home Mortgage
John R asked:
Potential buyers of our parents home were “pre-approved” for a loan greater than the selling price, yet were denied approval of their official loan application.
Tracy
Potential buyers of our parents home were “pre-approved” for a loan greater than the selling price, yet were denied approval of their official loan application.
Tracy
March 29th, 2009 at 3:15 pm
Jeremy
Dee they have to check your background and credit to se if it meets their standards or if you get pre approved.HOpe you got.Good luck with everything.
April 1st, 2009 at 10:31 pm
Jane
Preapproval just states that if everything is exactly as the borrowers described to the loan officer they should get approved for a loan. It’s nothing concrete, if their employment history is different, or income is less, or their debt ratios are higher, these are all reasons why it could then be declined later. preapprovals are granted without any documentation being provided or reviewed by an underwriter so even if only minor things change it can kill the loan. That is why sellers should requires a preapproval upon signing the contract and then make a contingnecy that they receive a loan commitment from the borrowers lender within 2 weeks to make sure they will be approved.
April 2nd, 2009 at 2:26 am
Vernon
pre-approved means that the buyers had their credit checked and could afford up to a certain amount.
maybe the appraiser didn’t appraise the house high enough.
maybe they bought a car and brought up their debt ratio.
they are a lot more maybes.
maaybe you parents can keep the earnest money.
April 3rd, 2009 at 5:39 am
Ricky
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