Win The Home Buying Battle With A Mortgage Pre Approval Letter

If you are searching for a home, the one indispensable tool that can help you realize your desires is a mortgage pre approval letter. Issued by a mortgage loan officer, a mortgage pre approval offers something that a mortgage prequalification cannot: proof that you not only can afford the home you place a bid on, but you already have the mortgage loan arranged. Read on, please, for a closer look at how you can win the home buying battle with this useful tool.

Many real estate markets have cooled over the past year while others remain red hot. It isn't unheard of to learn that a home in one of these hot markets sold for tens of thousands of dollars above the asking price. Several buyers stepped forward, a bidding war broke out, and the house went to the highest bidder. Ideally, this type of response would be universal but it isn't.

Still, where there are two or more parties interested in a home, there is one thing a seller will look for when selecting a buyer: a mortgage pre approval letter. No, that prequalification test run by your realtor means nothing to a seller, but a letter documenting your ability to finance a home can catch the attention of the seller. This is an especially important advantage in the event the potential buyers are equal in other respects; a mortgage pre approval letter could be the tiebreaker.

To receive a mortgage pre approval letter a home shopper should shop for a loan before shopping for a home. Once a satisfactory lender and loan have been found, then go ahead with the mortgage application process. Once the review process has been completed ask for the loan officer to issue a letter stating that you have already been approved for a mortgage. Sure, the mortgage amount will likely change depending on home selected, price offered, and down payment tendered, but you'll be close enough to qualify for homes in your price range.

When tendering your offer on a home, you must mention that you do have a mortgage pre approval letter in hand. Expect that the realtor representing the seller will require you to furnish this information. If so, go ahead and do so and expect that you already have a big edge that most buyers do not bother to get. Thus, you stand a much greater chance of securing a home in a crowd of buyers.