What is a pre-approval letter?
A pre-approval letter is a letter you get from a bank and other money lenders that states the amount of money you are qualified for as a loan or a mortgage. The pre-approval amount can be different from multiple lenders. Therefore, it is a good idea to get quotes from different lenders and choose one that serves you best.
Benefits of Pre-approval Letter?
The Pre-approval Letter should be one of the first items you acquire when hunting for a house. Sellers will treat you seriously only when you have cash or the pre-approval letter. For this reason, the letter is a must if you want to have a successful house hunting experience.
In addition, the pre-approval letter will help you finalize your budget for the house. You can not start property showings without knowing your budget. Matter of fact, this is the first question your real estate agent will ask you. Learn more about other house buying checklist tips.
Last but not least, the pre-approval letter will help you narrow down properties.
Can you start looking for houses without the pre-approval letter?
Although it is possible to start showings without a pre-approval letter, it is not a good idea. This will be like looking for houses without the money to buy one. How is the seller going to know that you are a serious buyer without cash or a pre-approval letter? This will be a mistake you don’t want to make when you are buying a house. Learn more about mistakes you should not make when buying a house.
What would happen if you fall in love with a house you cannot afford? This situation will make you stretch your financial options to own an overly expensive house. By having the pre-approval letter, you will avoid looking into houses that are outside of your reach.
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