Getting A Pre-Approval Letter

mortgage applicationMany people dream of a future home that is small enough for a single person or large enough for a growing family. They have specific desires for their house, but find that once they are searching, what they want is more expensive than what they can afford. House prices in Lansbrook have rose sharply over the past 10 years and today’s real estate market is very competitive as well. For this reason, if you are considering buying a home it is best to first speak to a lending agent to see how much of a mortgage loan you can afford. This will give you a confident maximum amount of money that you can afford to buy. It is also important to remember that many lenders are willing to give you more than you may feel comfortable paying on a monthly basis. Factor in your lifestyle and expenses that reach beyond your daily home living and the amount of money you will need for larger utility expenses or home improvements. You want to be able to afford the house, and be comfortable at the same time.

There are two types of letters you can seek from a mortgage company that will help you in your pre-planning steps. A pre-qualified letter will state how much money you can borrow based off of information you verbally give to a lender. It will give you a rough estimate of what you can afford based on your income, debt and valuable information. It is more of a good educated guess than an exact amount.

A second letter called a pre-approval letter will state how much the lender is willing to give you based on financial documents, credit history and verified assets. The pre-approval letter is much more significant and can provide you with a valuable bargaining tool if you want to make a solid offer or get into a bidding war over a house. Sellers feel much more confident going under contract with someone who has been approved for a
mortgage loan then someone who has yet to speak with a reputable lender.

Whichever you choose it is important to be an informed buyer and seem confident when you speak to the seller’s agent or homeowner themselves. Knowing your financial status is one way to help you realize your dream of a new home whether it is in Lansbrook or somewhere else.


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