If you?re thinking about investing in a new home you may find that having a preapproval letter from a mortgage lender is a great way to start. The preapproval letter isn?t necessary but it can help you seal the deal and speed up the process once you find the home you want.
Preapproval letters hold more clout than prequalification letters and the extra paperwork will let you know exactly how much the lender is willing to give you. Sellers tend to prefer working with a buyer that is preapproved because the there is no question about whether they will qualify for a loan and how much they can get. If there is a bidding war the preapproval letter can be key in swinging things your way.
You may also find that realtors are a bit more zealous when you have a preapproval letter as it signals to them that you?re serious about making a purchase.
While a preapproval letter may help you throughout the home buying process it doesn?t necessarily guarantee you?ll get the amount you?re preapproved for. The bank does reserve the right to learn about the property to make sure it?s worth the investment. Preapproval letters are also limited to a certain amount of time so if your preapproval letter expires you?ll have to get a new one and complete all the paperwork again.