Prequlification Letter
I'm in Virginia and the realtor I am working with request that I submit offers with a prequalification letter. The problem I am having is that all of the lenders I go to want the paticulars on the home first, but thats the problem I don't know what info they want if I don't have a house yet please help.
I was a mortgage broker for 2 years and I had this issue come to my desk several times. A prequalification letter is simply a letter from a lender (or a brokerage) stating that your credit rating has been "pre"qualified for a loan. I know I just stated the obvious, but that is the essence of a prequal letter.
How does one get "pre"qualified? Simple, anyone with a pulse is "pre"qualified for a loan. The easiest way out of this is go to a mortgage broker, tell them your situation and they should provide you with the documents you need. All it takes is a 5 minute application and credit check, but everyone qualifies for SOME kind of financing.
I do have a question, however. What if you were paying cash? What kind of proof would the realtor require then?
Hey,
If you are paying with CASH, you show them a copy of a bank statement, etc.
REO like cash.
Since so many transactions used to be cancelled beacuse the buyer couldn't qualify for a mortgage, the "pre-qual" letter was created.
Any decent mortgage broker, or bank should have no problem putting in writing the fact that you have been pre-approved up to a certain loan amount. However you'll want to be a little careful here--> if you have a letter that says approved to $225,000; and you offer $210k on a house listed at $230- expect a counter offer at $225k!
As for the "Cash" question; a copy of a bank statement with the purchase money on deposit is normally readily accepted.