If you want to start looking for a house to buy, you will need to find a real estate agent to help you through this event. When hiring an agent, they will ask for several things. The primary thing they might ask for is a mortgage preapproval letter. Do you know what this is? If you do not know, you will need to learn because you will need one to start shopping for a house.
The Basic Concept of a Mortgage Preapproval Letter
A mortgage preapproval letter comes from a real estate lender and states several vital things. Here are the main things it states:
- The person currently meets the eligibility requirements for a home loan
- The amount the person can borrow
- The expiration date of the guarantee
A mortgage preapproval letter basically tells a person that they can get a mortgage loan based on the current financial state. In other words, this letter gives a person the green light to start shopping for a home to buy.
Why You Need One
You need a mortgage preapproval letter for three main reasons:
- To prove to your real estate agent and home sellers that you are a serious buyer
- To know how much you can spend on a home purchase
- To save time on the loan process after selecting a home
Most agents require these letters with new clients. If you do not have one yet, you should work on getting one from your lender.
How to Get One
The process of getting a preapproval letter takes some time. You will need to start by selecting a lender. Next, you will need to fill out the required application and submit proof of income and other things. The lender will review everything before deciding if you meet the requirements. If you meet them, they will issue you a mortgage preapproval letter.
What a Mortgage Preapproval Letter Is Not
The most important thing to know is that a mortgage preapproval letter is not equivalent to an approval. Before you can get the actual loan, the lender will reevaluate all your financial information to make sure you still qualify.
Are you ready to start touring homes for sale to find one to purchase? If so, you might want to begin by selecting a lender so you can get preapproved. You will need to complete this step before you can start viewing homes for sale.
Contact a lender like Capital On Demand to learn more.
Share