Prior to buying a home, it is generally a good idea to get tentative loan approval from a mortgage lender. This can help a person in California or elsewhere get a better idea of how much they qualify for. However, it is important to know how long the approval will be good for, and in most cases, an individual will have up to 90 days to obtain an actual loan.
This is because an individual’s financial circumstances may change enough after 90 days to alter a lender’s decision. For instance, a person could lose a job, incur a new expense or otherwise look like less of sure thing to repay tens or hundreds of thousands of dollars. During this process, a lender will look at a person’s income, asset and other financial information. It will help that bank, credit union or other financial institution determine if a prospective borrower is worth working with.
Once tentative approval has been given, the lender will write a letter stating the amount that a borrower can reasonably expect to receive. This letter will usually be submitted with any offer made to buy a home. Those who need more time can usually get it by providing current income or other financial statements to the lender that has provided the approval.
A real estate closing may take several weeks or months to complete. Therefore, it is important that a buyer obtain enough time to close on a deal before a lender takes back their initial loan approval. An attorney might be able to work with a buyer to ensure that a sale is finalized promptly. This person may also work with a buyer to ensure that the deal is reasonable and that it’s structured in accordance with state laws.