Putting your full faith in a mortgage pre-approval is like betting on a heavy favorite in a horse race. You’ll probably win but there’s room for major disappointment. Sure, pre-approvals have benefits.
The best ones accurately measure your qualifications and how much house you can afford.
Their 90- to 120-day rate guarantees protect you if rates rocket up while you’re home hunting.
They make you seem more serious to sellers and real estate agents. (In competitive bidding situations, they’re almost mandatory.)
They’re free and there’s no obligation to use the lender that pre-approved you.
But here’s the problem: pre-approvals are not full approvals. So if you’re going to rely on one, you need to understand their limitations. Read MORE