Chapter 3: Loan Prequalification & Preapproval
Lenders will generally preapprove you up to a certain amount and issue a preapproval letter. This isn’t a binding step (neither is prequalification), and getting preapproved for a loan does not guarantee you will ultimately get it. But that letter indicates to sellers and real estate agents that you’re a serious buyer who can handle the financial commitment of a mortgage.
During the prequalification process, a VA loan specialist will take a look at your credit scores and ask for a rough estimate of your income.
Typically in minutes you'll know:
- Where you stand credit-wise
- A basic range or your purchasing power
- How to move on to preapproval
Loan preapproval is more involved. You’ll fill out paperwork and sign document as lenders get a clearer picture of your:
- Total income
- Major fixes and revolving debts
- Ratio of debt-to-income
- Amount of residual income left over each month
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