If you’ve never purchased a home before, you probably have some questions—including questions about mortgage pre-approval letters.
So what, exactly, are some of the common questions buyers have around the pre-approval process?
- What is a mortgage pre-approval letter? A mortgage pre-approval letter is a document from a lender that states you are pre-approved for a loan for up to a specific dollar amount. A mortgage pre-approval letter shows sellers that you’ve gone through the pre-approval process (including sharing financial documents with the lender) and are able to finance a home purchase. Check out our First Time Home Buyer steps here.
- Do you need a pre-approval to tour homes? No, you don’t technically need a pre-approval letter to tour homes. But it makes more sense to have one before you even start looking so you know you can afford the homes you are looking at. (Nothing worse than falling in love with a home you can’t qualify to buy!) Plus, you’ll need one when the time comes to make an offer, since most owners and listing agents will want to see it included with your offer. You don’t want to lose precious time getting pre-approved and lose the house of your dreams to another buyer who already had theirs in hand.
- How do you get a mortgage pre-approval letter? To get your mortgage pre-approval letter, you’ll need to go through the pre-approval process with a lender—which includes filling out an application, providing financial documentation, and a credit check.