Mortgage Preapproval
Why Get Preapproved?
- Learn how much you can confidently offer when you find the right home
- Show your real estate agent and potential sellers that you're a serious buyer
- Complete the mortgage process more quickly once you find a home
- Protect yourself from rate increases while you shop for a home with a verified preapproval and our Lock and Shop optionFootnote 1
What Impacts Preapprovals
- Debt-to-income ratio
- Credit history and credit score
- Verification of employment (verified preapprovals only)
- Income and assets
We Offer 2 Types: a Preapproval Letter and a Verified Preapproval Letter
Preapproval Letter
The preapproval letter we'll give you includes an estimate of how much you could borrow based on what you tell us about your income, assets and debts. We'll ask you to submit documents to confirm this information later in the process, so it's a good idea to start collecting your information right away.
Since we don't need documents upfront, we can typically have your preapproval letter ready within minutes, sometimes instantly, after you submit your application. Though a preapproval provides an estimate of how much you could be able to borrow, it's not a commitment to lend.
Verified Preapproval Letter
A verified preapproval letter takes it one step further. This type of preapproval is issued after a full underwriting review and approval of loan documentation and creditworthiness. When you apply for a verified preapproval, you’ll be required to provide documentation about your financial history upfront. This allows us to verify the information and issue a letter that includes the amount you're approved to borrow and states that income, assets and credit have been verified.
With a verified preapproval, you can take advantage of our Lock and Shop program.Footnote 1 This allows you to lock in your interest rate for up to 60 days while you find your home, and then up to another 60 days to process and close your loan after you submit a purchase agreement. If rates go down after you secure a purchase agreement, you'll have a one-time opportunity to float down to that lower rate at no additional cost.
Interested in getting a verified preapproval letter? Ask your home loan advisor.
Both a preapproval and a verified preapproval are good for at least 30 days and as long as 90 days if you stay in touch with your home loan advisor. After that, we may need to pull your credit again to confirm that nothing about your financial situation has changed.
Preapproval vs. Verified Preapproval
| Feature | Preapproval | Verified Preapproval |
|---|---|---|
| Can be used to make an offer on a home | ✓ | ✓ |
| Hard credit pull | ✓ | ✓ |
| Income and assets verified by an underwriter | ✓ | |
| Lock and Shop optionFootnote 1 | ✓ |
What You Need to Know
Preapproval
- Completed quickly, in some cases instantly—depending on your eligibility
- Gives you and your real estate agent an estimate of how much you can afford, based on your stated income and assets
- Gives potential sellers confidence in your offer
- Converts to an application for a mortgage loan after you identify the property you wish to purchase
- May require additional documentation if you're self-employed
Verified Preapproval
- Requires you to submit documentation within 24 to 48 hours of opting in for a Verified Preapproval
- Includes a thorough review of your income, assets and credit history early in the process
- Gives your real estate agent and potential sellers confidence in your buying power
- Helps you stay competitive in a fast-paced market when bidding against cash buyers
- Reduces the time it takes to close on your loan after you submit the purchase agreement
- Allows you to lock in your interest rate while you shop for a home with Lock and ShopFootnote 1
Protect Yourself From Rate Increases
Once you have a verified preapproval, you can take advantage of our Lock and ShopFootnote 1 option. It allows you to lock in your interest rate for up to 60 days while you shop for a home and then for another 60 days after you submit a Purchase Agreement.
Ask your Loan Officer for details!
More About the Mortgage Process
-
The Mortgage Loan Process in 10 Steps
It starts with a preapproval and finishes with your perfect home. We've broken down the process to make it easier for you.
Learn More about The Mortgage Loan Process in 10 Steps -
Mortgage Application Checklist
Don't miss a step with our mortgage checklist, and know what to expect during each part of the process.
Learn More about Mortgage Application Checklist -
Closing On Your Mortgage
The last step in your home-buying journey is closing on your mortgage—also referred to as settlement. After you complete the process, legal ownership will be transferred to you.
Learn More about Closing On Your Mortgage
Disclosures
The Lock and Shop option is available for purchase transactions under the Verified Preapproval Loan (VPAL) program. It allows members to lock their rate while they shop for a property for a fee of 0.125% in rate. Members have 60 calendar days to secure a ratified sales contract, plus 60 additional calendar days for Navy Federal to process and close their loan (total 120-day lock commitment). In the event the VPAL expires or a ratified contract is not secured within the first 60 days, whichever happens first, the lock will become void and the loan will revert to float status, subject to standard rate lock policies. If rates improve after a ratified sales contract is secured, members are eligible for a one-time re-lock with a maximum interest rate reduction of up to 0.500% at no additional cost.
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