A serious home buyer starts his work at a lender’s office and not at an open house. Consulting a lender and obtaining a pre – approval letter to buy a home is beneficial in many ways. Here are certain things that one needs to be pre – approved for a mortgage
How does the process happen?
1. The buyer should discuss loan option with the lender.
2. Secondly, the lender checks the credit balances of the buyer and alerts him about potential problems
3. Finally, the lender informs the buyer about his maximum borrowing limit.
4. When this borrowing limit is given as a properly signed verified document it is called pre - approval
What is the need of the pre – approval letter?
Having a pre – approval letter will make the negotiation with the sellers easier. The sellers gain trust if one can obtain proof of financing through the pre – approval letter
Pre – qualification Vs Pre – approval
Pre – qualification is the estimate of how much can one afford to spend on his home. On the other hand, pre – approval is checked by the lender himself. So, it is an authorized pre – qualification.