A PreQual letter, what is that?
In this day and age and in Colorado one of the most important things you can do before house hunting is to contact a mortgage person and find out just what you qualify for. This is a very important part of the home buying process that many people tend to overlook (unless they are my clients).
A mortgage loan prequalification letter is important for many reasons. One of them would be to actually help the buyer. It will help you to determine exactly what you can afford to buy. I have seen people be pleasantly surprised as well as disappointed. The reality is you need to know either way. No point in wasting your time, your broker’s time, the seller’s time and the listing broker’s time looking at homes you can not afford. So for that alone should be reason enough to get your prequalification letter.
Another good reason would be to make your offer stronger. Sellers need to know you have made the first and very basic step in being a serious buyer to purchase their pride and joy. Many sellers these days will not even entertain an offer that isn’t accompanied by a letter.
The process is painless and very simple. You can either call your favorite local lender or ask your real estate broker to refer some to you. After that it’s as simple as a phone call. The mortgage loan broker will ask you a few basic questions and determine your buying power. After that will draft a simple letter saying you are a good candidate for a loan. Keep in mind this is not guarantee just that if you meet certain conditions you will receive the loan.
This is the preliminary letter. Once you find a property you like the letter should changed to be the exact price as your first offer. It should also have the specific property address on it. If there is a counter at that point the letter should changed to the dollar amount on the offer.
That is a pre-qual letter in a nutshell. In this market it is very important to get in touch with your lender before you start looking at homes for sale. Listing agents and sellers are requiring before they take an offer seriously. If another buyer makes an offer and has a deadline that expires before you can get in touch with your mortgage lender, you could very well lose that home.
This is not real estate or legal advise. It’s just the views of an Evergreen Realtor.