If a client has received a commitment from a lender based on their complete loan application, what stage are they in?

When a client receives a commitment from a lender based on their complete loan application, they are in the pre-approval stage. At this point, the lender has reviewed the client's financial information, credit history, and other relevant factors to determine how much they are willing to lend, which signifies a deeper level of assessment than simple pre-qualification.

Pre-approval indicates that the lender has verified the borrower’s income, assets, and debts, providing a conditional commitment for a loan amount, usually contingent on the property appraisal and other conditions being met. It prepares the client for the next steps in the home-buying process and puts them in a stronger negotiating position with sellers.

Understanding the distinction between pre-qualification and pre-approval is essential. Pre-qualification typically involves a preliminary assessment where a lender gives an estimate of how much the client might be able to borrow based on self-reported information, without thorough verification. In contrast, the pre-approval process involves a comprehensive review of the client's financial situation, resulting in a more definitive commitment.

Final approval refers to the stage where the loan has been fully underwritten and all conditions have been satisfied before closing, while loan closing involves the signing of documents and the disbursement of funds. Thus, the correct