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I’m Pre-Approved for a Home Loan! What’s Next?

Just as an engagement ring tells the world that you’re headed down the aisle, a pre-approval letter puts you on the path to homeownership.
 

pre-approval letter is an official document from your lender stating what size mortgage you may secure. Pre-approval is a strong indicator of your ability to purchase a home contingent upon the appraisal, purchase contract and other related factors.
 

What does my pre-approval letter include?1

  • Type of mortgage (30-year fixed, 15-year ARM, etc.).
  • Maximum loan amount.
  • Maximum purchase price, based on loan + down payment.
  • Expiration date (after this date, a new pre-approval would be required).


How do I use my pre-approval letter?

  • You may choose to share it with your real estate agent to ensure that you are looking at properties within your target price range.
  • While you are not required to share the actual letter with the listing agent, your real estate agent should indicate the presence of such a letter when negotiating the price.
  • The pre-approval letter will be provided to the listing agent and their client when signing a purchase contract.


Do I need to show my pre-approval letter when attending an open house or visiting a listed property?

  • It’s certainly a good idea to have your pre-approval letter with you for reference. However, you may not want to “show your hand” by providing a listing agent with the pre-approved amount.


 

1 A typical pre-approval letter includes the items listed above. However, your actual document may include fewer or additional items.


- By Stephanie Clark , Sep 17, 2018



 
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