Getting a Pre-qualification letter

The most obvious requirement in order to successfully purchase a home is to qualify for home loan financing. The only exception to the rule is if you have cash on hand to buy the property out right. Most people find themselves working backwards in a real estate transaction. I can’t tell you how many potential home buyers will call us up, stating that they found a home and are now looking to get financing for that home. Attempting to finance a home after the fact can set you up for heartbreak. You should find out what you qualify for first before beginning the buying process. The Pre-qualification process is simple and should take no time at all.

Pre-qualification begins by talking to a licensed mortgage broker. The broker will input all of your information into a loan application. Once the application is complete a credit report will be pulled. Between the application and the credit report the mortgage broker can determine whether you will qualify for home loan financing. The broker will also help you determine what price range you should be looking at as you begin to shop for a home.

There are several things that can create difficulties for you and your family by approaching a real estate transaction from the wrong direction. First, you may not qualify for the home you picked out. Another obstacle is that you may have had an expectation of what the payments should be, but after going through the loan approval process, you find out that the payments are actually considerably different than what you expected. The real estate market understands the importance of qualifying for a home loan first, and has begun to adapt a process that will motivate future home buyers to get pre-qualified.

More and more sellers are requiring a pre-qualification letter from a lender, before they review any offers made on the home. In essence, the offer you make will not be considered without an actual pre-qualification letter added to the offer. The only way to obtain the pre-qualification letter is to contact a lender and begin the home loan financing process. If you think about it, it makes sense for a seller to make this a requirement. When the seller accepts an offer on the home, the home will need to be taken off of the market. Therefore, it is in the best interest of the seller to make sure the potential buyers are qualified to buy.

Put Prequal letter here

Once the mortgage broker has a chance to review the application a determination of Pre-qualification can take place. If the applicant does not qualify, the broker will issue a credit denial letter. On the other hand, if the applicant qualifies a Pre-qualification letter will be issued. Here is a sample Pre-qualification letter we use:

he final thing to keep in mind in a pre-qualification process is that it is not a final approval on your loan. This is why it becomes critical to have a mortgage broker that will work as a trusted advisor for your home loan needs. The mortgage broker market has improved, but there are still individuals that will issue a pre-qualification without actually qualifying you. This too can be a frustrating moment if in fact you wind up not being approved for the loan. It is best to do your homework and only work with mortgage brokers you deem creditable.