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Over the last few years, seller and buyers of real estate have placed much more importance on mortgage pre-approval letters. Sellers want pre-approvals before they accept offers, buyers want pre-approval before they start looking for homes and realtors want pre-approval letters before they will bring offers to their sellers and start working with buyers. But what does a mortgage pre-approval letter really mean? During this time of the ‘credit crunch’, sellers and buyers of real estate have to be aware of what a mortgage pre-approval means and the implications associated with it. A mortgage pre-approval letter is issued by a mortgage broker or bank, and given to an individual stating that the individual can qualify for a mortgage. Usually a mortgage broker will run a credit report, ask the individual a few questions about occupation, length of employment and income. Sometimes they may ask about the amount of money the individual has and/or is willing to put into the transaction. Then, a letter will be issued stating that based on the information provided the individual will qualify for a mortgage. Note that at this point the information has not been verified. Also, note that the letter did not say that the individual has been guaranteed a mortgage. It simply states that the individual will qualify for a mortgage based on the unverified information that has been provider by the buyer. And so the questions come up, ‘What does a pre-approval letter mean to a seller? What does a pre-approval letter mean to a buyer?’ What sellers and buyers receive form a pre-approval letter is a warm and fuzzy feeling. The warm and fuzzy feeling that a seller’s home will be sold. The warm and fuzzy feeling that a buyer will get any home desired for his/her family. What is the cost of this warm and fuzzy feeling? Sometimes is cost hundreds of dollars and more often than not it costs tens of thousands. What is it going to cost you? For the next installment of this got-to-have article email you name and phone# to Lynnkaram12@gmail.com
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