Here are answers to frequently asked questions by buyers:
- Being Pre-Approved means that a potential buyer has made a preliminary loan application and provided supporting documentation to verify their income and assets. It also means providing permission to the lender to review their credit. Based on that information, the lender will determine what loan amount a potential buyer could qualify for and the maximum purchase price of a home that buyer could purchase.
- There are several reasons. The primary reason is so the buyer can be well informed regarding their ability to purchase a home and what the costs of financing a future home will be. The pre-approval process can also highlight red flags; for example, if a buyer has a low credit score, a lender can help them with a plan to improve that score thus qualifying a buyer for a potentially lower interest rate.
- And, you will need to be pre-approved to write a meaningful offer for a home purchase. In our market, a seller will not consider your offer unless it is accompanied by a pre-approval letter for a licensed loan officer and documents that the buyer can qualify for the purchase price and the loan amount given in the offer.
