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Today’s seller will not accept an offer from a potential buyer without a preapproval letter. In the past, many buyers opted for the easier-to-obtain prequalification letter. In today’s market, however, bidding wars are commonplace and a full preapproval letter is a must. The letter must state the lender has not only verified your credit, but your income and assets as well.
A preapproval differs from a prequalification. With a pre-qualification, the lender relies on information provided by the buyer, in order to estimate the amount he or she can borrow. With a pre-approval, the lender verifies the buyer’s information and documentation to determine exactly how much the borrower can afford. It also establishes the down payment and available loan programs.
The process of obtaining a mortgage can be stressful. Getting pre-approved ahead of time will go a long way in making the process more enjoyable. Providing more documentation upfront decreases the chances of unexpected surprises, or a last minute scramble to provide the necessary documentation. The documents needed for pre-approval are many of the same documents required during the actual loan process. While a preapproval is not a loan commitment, it is extremely helpful in speeding up the approval process, once an offer is accepted and a closing date is determined.
Many buyers assume they will qualify for the home their neighbor, co-worker, or friend bought. There are many factors, however, that go into determining what home you can afford. Credit history, credit score, a source of income, assets and mortgage history are just a few. Being proactive is crucial. It is estimated there are over 40-million errors on credit reports in the US at any given time. Give yourself time to fix any unexpected issues that may arise during the preapproval process.
Sammamish Mortgage offers free preapprovals. There is no application fee, or fee of any kind, to get preapproved. Click the link below to get started today.
If you’re a buyer who’s ready to find a new home in Washington, Oregon, Idaho, or Colorado, Sammamish Mortgage can help. We’re a local, family-owned mortgage firm based in the Washington area and serve the entire state, in addition to the broader Pacific Northwest region including Oregon, Colorado, and Idaho. Please get in touch with us with any mortgage-related questions or to get a rate quote.