Great answers so far. Not until your lender has reviewed the COMPLETE file - credit report, income, asset documents, etc - do you know if you are approved. Even then your final approval status may hinge on the appraised value and condition of the home. The credit report is a key part in any approval, and it could define the terms of your loan. For example, if your middle credit score is 739 as opposed to 740 this may make a .25% difference in the rate you can get.

This is not to worry you. Chances are if you told the lender you have perfect credit (never missed a payment and low amounts of debt) and if your income and down payment is solid you should be able to be approved. However, you've got to question the fact that they are telling you you're pre-approved without verifying anything. Speak to your loan officer and ask him or her to clearly explain where you are at in the process, and if you feel uncomfortable with the explanation then by all means get a second opinion from a local, reputable lender.
Hope this helps!

Hi, Tee

The previous answer is spot on. Unless a lender has actually verified your income, assests, credit score/history, and employment, you don't have anything to competently stand on and take to a seller to better negotiate a lower sale price and/or more seller concessions, both of which could mean you saving thousands in closing costs and/or 10s of thousands over the life and term of your loan. That's the primary reason for getting an actual preapproval: for you to know where you stand so that you can negotiate from a position of strength. Until you do, do not, and I repeat: DO NOT do anything else. Again, if the lender you currently working with said that what you had was an actual preapproval and good enough to start looking for and putting offers on homes, run, do not walk, but run away! They are either not competent enough to reprersent you or are not being competely upfront with you Literally and figuratively, you cannot afford either. Preview my profile, and if you wish upon doing so, I would be more than happy to assist you further.
My toll free number is: 800-678-6663 Ext 5154.

Tee,

Based on what you're saying here, it sounds like you were pre-qualified rather than pre-approved, and that is a significant difference.

A pre-qualification is simply a letter issued to a borrower who is interested in purchasing a home. This pre-qualification letter indicates the size of a mortgage loan that you can manage to pay on a monthly basis, which is a determination based on monthly income and any outstanding recurring debt. Even if a pre-qualification letter is issued, it must not be mistaken for a commitment to lend. The pre-qualification letter simply indicates to a seller that you are financially qualified to make an offer on a home.

A pre-approval is a level above a pre-qualification letter. A pre-approval includes the verification of employment, credit history, down payment, etc. Once this information is validated, the mortgage application is submitted to a credit officer (underwriter) to make a final decision. Once approved by an underwriter, a pre-approval certificate (commitment to lend) is issued. This commitment to lend allows for borrowers to close very quickly once a home is found. When a borrower has a commitment from a lender, it can drastically improve the negotiation of a sales price with a seller since it is as close as a borrower can get to actually having the cash in hand to pay for a home.

If your mortgage company told you you were pre-approved, you may want to reconsider doing business with them. What else will they withhold from you? Then again, it may just be a simple miscommunication. I would recommend touching base with them.

I hope this information helps. Best of luck!

Regards,
Total Mortgage Services