A preapproval from a lender is a tentative agreement to give you a mortgage of a certain amount. For example, a credit union might preapprove you for a mortgage of up to $250,000, at a 4.3% interest rate based on your 795 credit score. The preapproval does not guarantee that you will get that loan at that amount and rate, but it does prove to the home seller that you are able to buy their house. Bring your pay stub, proof of down payment and credit history to several lenders to get preapproved for a mortgage up to a certain amount, with a certain down payment at a mortgage rate. Know that if market conditions change substantially, the loan terms might change, affecting the amount you can afford. This calculator can help you estimate how much house you can afford. A prequalification is a less authoritative estimate of how much mortgage you would likely qualify for. It is a guesstimate. Get prequalified when you start your househunt. Once you have narrowed down your options, get preapproved so you are ready to negotiate a deal.
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