A pre-approval letter is an official document from a lender that lets the borrower know you are serious, you can get the money, and that the closing process should be smooth and fast. This letter can be shown to sellers at the appropriate time to show the specific mortgage amount they are approved for. These are all things the seller would love to know up front, making it easier for them to accept your offer on the home.
Pre-approval vs. pre-qualification
A pre-approval is different from a pre-qualification. A pre-qualification simply looks at your income, debt and assets. A lender can give you a very rough estimate of what you might be able to afford. At this point your credit score and history, employment history, and other factors have not been considered yet.
Complete a loan application
A pre-approval occurs after a complete loan application has been completed. An advantage of going through a mortgage broker for this process is that the broker has many more options available to them to match the best loan possible to your situation. Banks and other institutions are often limited by the loan products they offer internally. A mortgage broker literally shops the nation, often beating what the banks and other institutions can offer.
Advantage over other home buyers
As you shop for a home, you may encounter many sellers who started the loan process with other buyers only to learn later that the buyers could not qualify for the loan. Oftentimes, sellers need to sell their property quickly at a fair price. Any delays could be costly to them. Armed with your new secret weapon in hand, your pre-approval letter, sellers will entertain your offer as one with less risk. This can also give you a huge advantage when there are competing offers on the same home.
Your mortgage broker can help you get a pre-approval letter by having you complete a loan application. You can go to IntegrityLending.com and start the application process online.
We’d love to help get you into your first home, armed with a secret weapon.