Why You Need a Pre-Approval Letter

Thought you might be interested in an article Why You Need a Pre-Approval Letter and thought I’d share a few points with you here. I’ve found some relevant information here so if I find more, I’ll be sure to pass it on.

Make sure you get a pre-approval for a mortgage, not a pre-qualification. A pre-qualification is where you give a mortgage broker a hypothetical set of credit scores, income, etc., and they give you back an interest rate and terms that the hypothetical borrower you've described would qualify for. A pre-approval is where the mortgage pro reviews your credit, your income and your assets, and conditionally offers you a particular mortgage (or several), putting that offer in writing in letter form. It is critical that you be pre-approved -- not pre-qualified -- before you get in the car to go house hunting with your Realtor because:

• You can make an offer as soon as you see "the one" - Most sellers won't even look at an offer to purchase their home that is not accompanied by a pre-approval letter. If you see it, then have to wait a day to get a pre-approval letter, you could very well end up losing your new home or wind up in a bidding war over it.
• You won't see homes that are way below your price range - People who erroneously assume they can only afford a $150,000 house might get really depressed, disgusted and frustrated with what they can find in some markets.

If you want to keep reading with any of that content, by all means, click here. Please feel free to contact me on (0403) 296-221 or email at [email protected] for any thoughts and perspectives.

Thanks,

Tammie