Q:

What does "conditionally approved loan" mean?

A:

A conditionally approved loan is a loan approval based on the financial and credit information that an applicant has provided, and it is subject to final verification. Final verification includes employment and income verification, and additional documentation, such as pay stubs, bank statements and utility bills, is required before the loan is completely approved.

A common misconception is that conditionally approved loans are the same as pre-approved loans. Pre-approved loans are pre-approved due to the fact that the lender has reviewed the applicant's income and credit information and has made a decision based on those findings. The borrower's information is then verified by the loan underwriter, and the loan is processed. Conditional approvals are provided by the underwriter after they have verified additional documents and income, and the borrower must meet all stipulations of the lender in order for the loan to move on to final approval.

Conditional loans are common practice in the mortgage industry. Homes must pass an initial inspection, and the property must be appraised. The lender also screens for liens or judgments on the home. If the lender is unable to accurately verify income or documentation, or finds a lien or a judgment on the borrower's record, the borrower is at a high risk for denial of the loan.


Is this answer helpful?

Similar Questions

  • Q:

    How do you get approved for a home loan?

    A:

    A potential homeowner gets approved for a home loan by having a good credit score, saving the money for a down payment on the home, maintaining steady employment and keeping down personal debt. It is also important to have documentation to prove financial stability to qualify for a loan.

    Full Answer >
    Filed Under:
  • Q:

    Where can I get help for finding free grants at no cost to me?

    A:

    According to USA.gov, grants that come at no cost to the applicant can be applied for and potentially received from the federal government, from states and from local communities. The federal government typically provides funds to local agencies that then distribute the grants for particular purposes.

    Full Answer >
    Filed Under:
  • Q:

    How do you apply for a mortgage pre-approval?

    A:

    To apply for a mortgage pre-approval, a person must provide detailed information about her income and assets that is then reviewed by the lender to ascertain whether or not the applicant is in a position to repay the loan. If approved, the person applying for a mortgage pre-approval gets a commitment of a certain loan amount from the lender.

    Full Answer >
    Filed Under:
  • Q:

    What is an FHA loan?

    A:

    A FHA loan is one which is insured by the Federal Housing Administration. FHA does not actually loan the money itself, but rather insures home mortgage loans issued by banks and other FHA-approved lenders so that the lender has reduced risk in the case of default by the borrower.

    Full Answer >
    Filed Under:

Explore