Guest Post by: Lacie Banks, Realtor, Coldwell Banker Upton Massamont Realtors
The pre-approval letter is generated after a buyer has consulted with a lending institution and provided basic information, such as income, assets, debt, and permission to pull your credit score to determine what type of mortgage you may qualify for and the mortgage amount.
When you are so interested in a property that you would like to submit an Offer to Purchase on it, most real estate agents and sellers will require a pre-approval letter from a bank or mortgage company if you are going to mortgage part of the sale price. If you are paying cash, a seller will ask for a proof-of-funds. The pre-approval letter or proof-of-funds needs to be submitted with the Offer before the seller is willing to take their house off the market during the Home Inspection period.
A good buyer’s agent will require a pre-approval from a bank before investing a lot of time showing property that a buyer may not be able to afford. A good listing agent will require that the prospective buyer be financially approved to purchase the property before asking the seller to prepare the house for a showing. It's just a normal part of the house hunting process now.
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Lacie is a Realtor with Coldwell Banker Upton Massamont Realtors. Connect with Lacie: