What is a mortgage preapproval?
A mortgage preapproval is a letter from a lender that states how much money they are willing to lend you to buy a home. It is not a guarantee of a loan, but it is a good indicator of how much you can afford to borrow.
Benefits of getting preapproved
Getting preapproved for a mortgage can have many benefits, including:
⋅ It shows realtors that you are capable of confidently looking at homes and making offers.
⋅ It shows sellers that you are a serious buyer.
⋅ It can help you close on your home faster.
How to get preapproved
To get preapproved for a mortgage, you will need to provide your lender with some financial information, including your income, assets, and debts. You will also need to authorize a credit check.
Here are the steps you can take to get preapproved for a mortgage with Centennial Bank
1. Gather your financial documents
This includes your most recent pay stubs, W-2s, tax returns, and bank statements.
2. Contact Centennial Mortgage
You can apply for preapproval online, over the phone, or in person at a branch.
3. Complete a loan application
You will need to provide information about your income, assets, and debts.
4. Authorize a credit check
This will allow Centennial Mortgage to assess your creditworthiness.
5. Review your preapproval letter
Once you are preapproved, you will receive a letter that states the amount of money you are preapproved to borrow.
Tips for getting preapproved
Get your credit score in good shape
The higher your credit score, the better your chances of getting preapproved for a mortgage.
Save up for a down payment
A larger down payment will make you a more attractive borrower.
Get your financial documents in order
This will make the preapproval process go more smoothly.
Prequalification vs. Preapproval: What's the Difference?
Prequalification
Preapproval
Benefits of Preapproval
Which is Right for You?
How to Get Prequalified or Preapproved
Prequalification
⋅ Informal estimate of what you can afford.
⋅ Based on your self-reported financial information.
⋅ Credit check is required.
⋅ Can be done online or over the phone in a few minutes.
⋅ Ideal for touring available properties and getting an informal estimate of what you can afford.
Preapproval
⋅ More formal estimate of what you can afford.
⋅ Requires a credit check and verification of your financial information.
⋅ Takes a few days to process.
⋅ Ideal for preparing to buy a home and getting a more accurate estimate of what you can afford.
Benefits of Preapproval
⋅ Shows sellers that you're a serious buyer.
⋅ Gives you a more accurate idea of what you can afford.
⋅ Can help you close on your home faster.
Which is Right for You?
If you're just starting to think about buying a home, getting prequalified can be a good first step. This will give you a general idea of what you can afford. It’s not as thorough, but it is quick.
If you’re wanting to take the process a step further, getting preapproved is also a good option but can take a little longer. However, it shows realtors and sellers that you’re a serious buyer.
How to Get Prequalified or Preapproved
To get prequalified or preapproved for a mortgage, you can contact Centennial Bank. We can help you understand your options and choose the right mortgage for your needs.
Disclosures
Requests for pre-approval must be submitted by the borrower and are only eligible for purchase transactions where a property address has not been identified and is "to be determined." Refinances are ineligible. The lender completes a comprehensive analysis of the applicant's creditworthiness. The underwriting is similar to that used to evaluate traditional mortgage applications. If an applicant is pre-approved, lender provides a written pre-approval letter to the applicant and is valid for a stated period of time for up to a specified amount. All loans are subject to credit approval and property eligibility restrictions. This is not a commitment to lend. Programs, rates, terms, and conditions are subject to change without notice.