Get Loan Pre-Approval Letter and Know Before Shopping!
How much money does your dream house cost? Better question is: How much money will a mortgage lender pre-approve for me to borrow?
We can help you get pre-approved for a home mortgage quickly! You can then shop for a property with an actual loan commitment or Pre-approval Letter as opposed to a Pre-qualification Letter. This is an advantage with sellers – knowing that you are practically ready to close on the sale.
A mortgage pre-approval is a letter from a mortgage lender indicating how much loan you qualify to borrow. It is issued after the lender has evaluated your financial history, which includes pulling your credit report and score.
With a pre-approval letter, you can find a home you can afford by shopping within your budget. This letter shows that you’re a serious buyer to sellers and their real estate agents.
A mortgage pre-approval letter can put way above other buyers who may be interested in the same home as you and don’t have their pre-approval yet. Getting pre-approved will help you find a mortgage lender who can work with you to find a home loan with an interest rate and other terms suitable for your needs and desires.
With a mortgage pre-qualification, a lender can give you an estimate of how much mortgage you’ll probably qualify for and some preliminary loan terms.
You estimate your credit score and provide a few details, including the purchase price of a home you would like to buy, your down payment, your monthly debts, and how you would want to structure your loan. For example, you need to know the total loan amount, the length for payments, down payment amount, fixed or adjustable rate interest.
With a mortgage pre-approval, you complete a full application, the lender pulls your credit report plus score and puts an offer in writing to give you a loan at a given interest rate.
Even with a mortgage pre-approval, your loan still has to go through underwriting which is the final stage of due diligence before issuing the loan. This happens after you have a home under contract.
What Documents Will Be Needed for Mortgage Pre-approval?
You’ll need to provide some information when applying for pre-approval which demonstrates your financial history and reliability to pay back the money borrowed.
This may include:
To make this process easier on you, create a folder in Google Drive or Dropbox and upload all documents into one place. If you wind up ultimately choosing a different lender than the one you used for your pre-approval, you’ll be able to share documents with just a few clicks.
While a pre-approval letter is proof that a mortgage lender is willing to make you loan, it is not an official commitment until you complete the full due diligence and application process.
Other things during the closing process can cause some challenges, including a low appraisal of the home’s value and your ability to make a sufficient down payment.
What a Mortgage Pre-approval Letter Says
A typical pre-approval letter will contain your current credit history, income, assets and debt. All this assumes that there are no changes in your financial situation while shopping for a property.
This pre-approval letter should not be considered a commitment to lend until the following conditions are met:
Now Can We Shop?
OK, let’s say you’ve received that precious piece of paper. You’re anxious to get started, practically packed and moving to your next address.
A couple of quick reminders:
That means it’s important to:
Having a pre-approval letter in hand is often required in order to write a contract with your offer for a home.
We suggest that you talk with a few mortgage lenders before committing to a loan. By applying to say three lenders rather than just one, you can compare all costs and get the best deal.
Some loans are 100% financed with no down payment and others for as little as 3% down in cash. Other loans are 20% down in cash with 80% financed. Different types of loans have different interest rates. Our lenders can tailor the best financing for your needs.
We do this to help you find the right home, taking the least amount of your time as possible with the loan process. We can recommend some mortgage brokers to you and then you choose which one to assist you.
Doug Martin 561-339-3299
Jason Martin 561-624-4544
Team’s Office 561-339-1779
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