Written
Proof That You Qualify-
Make Your Offer Stand Out
Getting qualified for a
loan is the first step in the home buying process. Before negotiating with the
seller, they often require written proof of the buyer’s financial
qualification.
Pre-qualification and
pre-approval are the two kinds of written proof for mortgage qualification. In
a pre-qualification letter, the lender has been provided with certain financial
details by the buyer and, therefore, based on verification of these details,
agrees to give a loan to the buyer. At this point, a credit report is not
required.
A pre-approval letter is the second written
proof. Because the buyer has already gone through the loan approval process,
this is the stronger letter. The lender will conduct checks on the
buyer’s credit and debt information with a formal credit report from one or
several credit bureaus and also confirm the buyer’s income with recent pay
stubs and W2s. While it provides increased chances of obtaining loan
financing, the approval process takes longer due to verification of the
buyer’s finances.
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