Mortgage Preapproval Documentation

Mortgage Preapproval Documentation

In the past two blogs I focused on 1) the importance of documentation and 2) types of effective documentation for small businesses. Today I will focus on one facet of real estate industry documentation.

Perhaps the most important step in purchasing a home is getting Pre-approved for a mortgage.

A mortgage Pre-approval indicates the Buyer will be offering to purchase a home with honest intentions.  A Pre-approval letter document gives a Seller reasonable assurance that the Buyer is financially qualified to purchase the property.

If a Seller accepts ab Offer for their home without the mortgage Pre-approval they will be taking it off the market for a period of time waiting for the Buyer to get a mortgage.  Doing so creates a risk for the Seller.

In empirical terms, a Pre-approval letter states that the lender has done a credit check, verifies the Buyer's income and checked on the Buyer's employment status.

The Seller's real estate agent is going to insist on getting the mortgage Pre-approval letter.  Agents do this to protect the Seller's best interests.  Thus it would be perfectly rational for the Buyer's agent to comply.

In a competitive Real Estate Market, not having a mortgage Pre-approval at the time making an Offer could prove costly.  Sellers who have received multiple Offers on their property are not going to be interested in waiting for a Buyer to scramble to obtain necessary proof of financing.

Judith McGann Headshot
Phone: 484-788-2699
Dated: August 17th 2018
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