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  • John Van Schoick, Realtor

Want a New Home? Get Pre-Approved!!!!


Is a mortgage pre-approval letter necessary to make an offer on a house? The short answer is no. However, if you want your offer to be taken seriously and to stand out from any competing bids, this little piece of paperwork can really give you the edge.


An offer I wrote last night, for a couple that found that "Perfect House", came back with a refusal to reply. The seller would not accept or counter offer unless a letter of pre-approval was presented to them. Now that "Perfect House" may be gone. "While you do not 'need' a pre-approval letter from your lender in order for your offer to be accepted, I will now highly recommend all of my buyers present it in the future. I will not look for homes with my buyers until they have a pre-approval letter from their lender. To me, it's that important and I do not want my clients to be disappointed!


So what is a pre-approval letter? Basically, a mortgage pre-approval letter is a guarantee from a lender that it's willing to finance your home purchase up to a certain dollar amount, based on financial info you've shared with it, such as your pay stubs and tax returns. Pre-approval should not be confused with pre-qualification. "These terms are often used interchangeably, but there is a big difference. A pre-qualification is provided based on info shared verbally that has not been verified. Pre-approval requires an underwriter to scrutinize your documentation and approve the income and assets for a loan. For that reason, pre-qualification can be done instantly, while it can take up to five days to be pre-approved, and in todays market possibly longer.


So, Please! Talk to your bank or credit union unless you have cash.




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