Blog Category: pre-qualification

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How Much Documentation Needs To Go Into a Pre-Approval Letter?

Today’s real estate market can be competitive for everyone. That’s why it’s important to understand the ins and outs of the home buying process before you hit the market. Let’s talk about what getting a mortgage pre-approval letter. It’s a good idea for anyone heading into the market for a new home. Read More

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Pre-Approval Letter Versus Pre-Qualification Letter: What Is the Difference?

When you’re beginning the home-buying process, figuring out what you need to get your mortgage loan can seem complicated. You may even be tempted to find your dream home first before you apply for a mortgage. However, going through the pre-qualification and pre-approval processes at the start of your search can make the entire experience go more smoothly.

Before you meet with a lender or mortgage broker, you should have a good understanding of how the loan process works. This guide covers the basics of loan application, qualification, and approval. Read More

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Should You Match Your Pre-Qualification Letter To Your Offer

When a homebuyer makes an offer on a home they may need a pre-qualification letter to include with the offer. Most realtors will ask the lender who has pre-qualified their client to write a pre-qualification letter to match the exact sales price of the offer. But a few realtors will ask for the pre-qualification letter to be written for the maximum amount the buyer is qualified. Read More

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The Pre-Qualification Letter Fake Out

 

I had a client I was working with recently who had a realtor I didn’t know. This realtor wanted me to write a pre-qualification letter for an offer they wanted to make on a house. They wanted me to write up a pre-qualification letter for a mortgage amount I did not think the buyer could qualify for. The realtor just wanted to get the property under contract and tie it up to see if we could work it out somehow after the fact. They just wanted to take a shot at getting the realtor commission. Think this is a rare event? Read More

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What Portion of My Income Should I Spend on a Mortgage?

What portion of my income should I spend on a mortgage? Deciding on how much mortgage you can afford is very complicated with several things to consider. Before you plan to spend the maximum amount you’ve been approved for, consider what you feel comfortable with. And don’t treat your home purchase like a zero-sum game. Consider spending a sufficient amount to buy enough house to keep you happy for a longer period of time. This is due to the hefty transaction costs of real estate. Read More

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When Is A Mortgage Really Approved?

When is an approval really an approval? When is an approval only a conditional approval? Below are the different levels of “loan approval” you can get for a mortgage:

Pre-Qualification:

Pre-qualification is done before you make an offer on a home. It is only a loan officer analysis, and supporting financial documents are not required. Only a review of the applicant’s income and debts are done. Standard methods of determining housing and debt ratios are used. This can help indicate the maximum loan amount for which an applicant would qualify. But it is subject to the satisfactory appraisal, further verifications of income, employment and credit history. This is the lowest form of analysis you can have done.

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Why Do Sellers and Realtors Want Me To Be Pre-Approved?

Always get your mortgage pre-approved! Homeownership is a major component of the American dream. It provides you with your own piece of property to put down roots and live your life. You might think the process starts when you first go out hunting for houses or condominiums. But it often begins long before the initial meeting with a realtor when you contact a lender for pre-approval. Here are a few reasons why the seller and listing agent might want you to get pre-approved. Read More