A lender can provide a pre-qualification letter following a simple 10-minute phone interview. A pre-approval letter is a firm commitment to lend money based on VERIFICATION of income in the form of employment, funds on deposit, and credit history.
There are several distinct advantages to using the pre-approval program:
- You look at the “right” homes that you can afford. You won’t be disappointed by choosing a home that you may not be able to afford.
- You save money dealing with a seller who is comfortable about “tying up” their home with a party who has a definite loan commitment. This is one less contingency for the seller to be concerned with.
- You close more quickly because in most cases, the item that takes the most time is getting a mortgage. Credit reports and all the verifications take time to be mailed out and returned.
- You minimize trauma by knowing whether or not you qualify.