A decision by a lender to extend credit in a specified amount, often accompanied by a loan commitment outlining the terms and conditions. Also referred to as Loan Preapproval when provided before formal loan application.
A process whereby a specific mortgage lender certifies that a prospective borrower is financially qualified and creditworthy for a specific type of loan with specified terms for an amount up to a specified maximum. Actual advancement of the loan will depend on the suitability and value of the collateral property, which is unspecified at the time of pre-approval. Contrast PREQUALIFY.
A Rate Lock secures a specified interest rate for a mortgage, assuring homebuyers or refinancers that their rate will not increase between the date of the agreement and the closing date of the loan, provided the borrower closes within the specified time frame and there are no changes to their application.
