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Preapproval vs approval

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vanillabean
Valued Contributor

Preapproval vs approval

Good morning and a happy week to you all.

Would it be fair to say that the preapproval process is not seeking credit specifically, but rather credit eligibility, in other words that a preapproval is not a loan commitment?
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ezdriver
Senior Contributor

Re: Preapproval vs approval


@Anonymous-own-fico wrote:
Good morning and a happy week to you all.

Would it be fair to say that the preapproval process is not seeking credit specifically, but rather credit eligibility, in other words that a preapproval is not a loan commitment?

You are on the right track ...

 

A pre-approval should be based on pulled credit report plus all additional financial information needed [usually delivered verbally] for a loan officer to issue a letter stating that your are qualified for a specific purchase scenario based on his opinion or a APPROVE ELIGIBLE from automated underwriting system. NOTE: underwriter have not reviewed your financials yet.

 

An approval is the outcome of an underwritier's review in which all information initially provided to the LO is supported by documentation [eg: pay stubs, bank statements, etc.]

 

Makes sense?

 

 

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