So you took care of all the red flags ...the Lender is satisfied and the lender says you are PRE-APPROVED for a certain loan amount. What does this mean?
It means that based on the information you provided you can now purchase a home up to a certain amount, whether $100,000, $250,000, $500,000. I know, I know you are excited because you can buy a house for a certain amount, even more than you thought, yeah!!!!
Also your pre-approval can be a great negotiating tool when you make an offer on a property........
Now ....let me ...say here, that just because the lender said you were approved for more than you even thought.... that you have to go out and purchase a property for that total amount....now don't go spending more than you want to.
You can ask the Lender to give you a pre-approval letter for the amount you feel comfortable borrowing for a house.
Once the loan application is signed, the lender has 72 hours to provide a Good Faith Estimate...this is required by Law. This is just an estimate ...and it will let you know how much money will be required for closing the loan..once you purchased a property ...and what your monthly mortgage payments would be like...
The good faith estimate will also include costs for the appraisal, title search, title insurance, recording fees, attorney fees, loan origination fees.
I know...I know....you are thinking there you go again with all these different terms....don't worry I will let you know what each of these terms mean, when you will use them throughout the process.....Don't worry....I have got your back.......will tell you more soon...!!!!!
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