House Hunting: Don't put in offers without it

Pre-approval letters usually include the following information:

Borrower's name(s)
Loan amount and/or purchase price
Interest rate
Down payment
Term (number of repayment months)
Type of property (single-family, condo, etc.)
Credit score or threshold range
Lender or Loan Officer contact information

A strong pre-approval letter will provide the amount of down payment or loan to value, if assets were verified or not, and loan program type (FHA, VA, Conventional, etc.).

Does a pre-approval letter guarantee I will get the loan?
A pre-approval letter is an initial review of how much you can look forward to being approved for. It's not legally binding to you or the lender. As soon as you have an accepted offer on a home, a more comprehensive review will be done by an underwriter.

If I am pre-approved will I be declined later?
A borrower who is declined after being pre-approved is usually due to:
1. not having complete income or assets documentation.
2. doesn't have a complete set of tax returns OR the IRS transcripts are different.
3. when assets are deposited or transferred to an account within the past 30 days and there's no ability to verify its source.
Pro Tip: Make sure the money is there for 60 days.

Other reasons why someone will be declined after they were approved before closing are:
• Increasing your debts with a new loan on a different transaction or co-signing a loan;
• Making a big purchase that requires financing such as buying a car, boat, etc.;
• Closing existing credit card accounts or opening new accounts;

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