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If I get pre-approved with 1 lender and I found the house, can I change my mind and deal with a different lender? What is the whole point of pre-approval before buying the house? Also, can I get a pre-approval in NY but the house I’m looking at is in AZ? My field of work will be the same. As I will be transfering with the same company.

Sorry for the multiple questions. First time homebuyer if you can’t already tell.. Thanks in advance.

6 Thoughts on How does pre-approval for mortgage work?
  1. Reply
    [email protected]
    December 12, 2012 at 4:30 pm

    yes, you can change lenders anytime you want up until you sign a contract and get the money. the point of pre approval is that it shows the sellers/agents/you what a company is willing to lend you. its as good as money in your pocket.

    its better off finding a preapproval in the are you are dealing with because the lender will almost always want to be there in person if you are borrowing a large sum.

    and why dont you ask your company, most companies that relocate people have very good, well thought out divisions that help you find and secure a loan, help you find a home, and help you sell your existing home

  2. Reply
    December 12, 2012 at 4:40 pm

    You should get preapproved with the lender you intend to use.

  3. Reply
    Rush is a band
    December 12, 2012 at 5:16 pm

    Pre-approvals are non-binding guidelines based on your credit report and things you report. A pre-approval is not a guarantee of money. It does, however, show a potential seller that you are serious and LIKELY to get the money you want.

    You can change lenders, but their standards may be different and might not approve you for the same amount.

    The lender just wants some collateral for the loan and may not care where it is. They would have to be licensed in the state that you want to buy in.

    Arizona is in a mess right now real estate wise. They have a ton of foreclosures. It may be difficult to get a house through the appraisal process.

    The real decision on the loan isn’t made until underwriting. That takes all of the details about your financial situation and the house you are trying to buy and the bank figures out if they can handle that risk for that price (interest rate). Until it comes back from underwriting nothing is guaranteed.

    good luck!

  4. Reply
    Richard N
    December 12, 2012 at 6:00 pm

    No problem switching to a different lender or broker.

    The point behind getting pre-approved is to officially tell the Realtor you are working with as well as the seller’s parties that your a viable candidate to buy their house.

    It makes no sense for them to allow you to make an offer on a 500K home for instance, when you can only afford a 200K home. So it’s just a formal step in the process. It doesn’t even necessarily mean you’ll get a loan. It just says “there’s a good possibility that this person can afford to buy this house.”

    Hope that helps, and I could help further.

  5. Reply
    Gotta B. Covered
    December 12, 2012 at 6:24 pm

    There’s never too many questions to ask. The important thing is that you are asking! A pre-approval is basically that you have gone beyond the preliminary steps of getting a pre-qualification. The advantage with a pre-approval is that everything has been verified and the amount that the bank will approve you for, gives you the knowledge needed to go and find a home that you can actually buy.

    Getting a pre-approval in various states will be about the same, but (and that’s a BIG but…) the loan to ratio values and debt to income may be different at different banks. Lenders set their own parameters, but if you get pre-approved at let’s say, Chase Bank in NY and decide to buy in AZ, you have a good chance that the ratios will be about the same.

    Hope this helps!

  6. Reply
    December 12, 2012 at 7:08 pm

    You can certainly change lenders and/or brokers.

    The reason why it’s so important for you to get pre-approved is that it demonstrates to the seller that you are a legitimate buyer. Remember, you’re competing with other buyers and if the seller feels that someone else is a stronger buyer (because they’ve gotten pre-approved and/or put up a bigger earnest deposit) they will dismiss your offer.

    As far as changing locations is concerned, you can certainly obtain financing because your employment and salary will not be negatively impacted by your move because you’re staying with the same company.

    Most important of all, however, is that you make a decision that is inline with your long term financial plans. This means that any new financing you obtain should take into account your children’s 529 college savings plan (if applicable), any major expenses you’re contemplating in the immediate future (a new car, the purchase of a second home, the birth of a child, etc., etc.), your present investment strategy, your insurance needs and obligations or other important financial plans that can be complicated or even derailed if you make the wrong decision about your mortgage financing now.

    If you’re looking for a balanced and comprehensive solution to your long term financing needs feel free to contact me at [email protected]. We are licensed in all 50 states and specialize in TAX FREE mortgages in the state of New York.

    Best Regards,

    J. Polanco
    Financing Advisor
    Robbins and Lloyd Mortgage Corp.
    347 5th Avenue, Suite 1506
    New York, New York 10016

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