What does preapproval really mean?

Any general questions you might have in regards to loans and finance.
gleeson
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What does preapproval really mean?

Postby gleeson » Mon Jun 15, 2009 3:05 pm

My family got was preapproved for a home loan, and were denied approval of our official loan application.

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Otto Dargan
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Re: What does preapproval really mean?

Postby Otto Dargan » Mon Jun 15, 2009 9:03 pm

Pre-approval is the lender saying "based on what you have told me so far your loan would be approved subject to LMI approval, acceptable valuation and me being in a good mood on that day". Basically preapproval is good but with some lenders such as St George is it a bit meaningless.

If the property you buy isn't acceptable to the bank or if LMI declines your loan or if there is some other problem then the end result is that formal approval will not be granted.
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