Do I Need to Be Pre-Approved to See Homes?
If you are completing any type of house hunting, you will read the terms pre-approval and pre-qualification quite frequently. Traditionally, buyers have only needed a pre-qualification or pre-approval letter at the time of submitting an offer. However, with a hot market and Covid-19 concerns, sellers have been requesting pre-approval letters to tour the home. Since this is a recent change in the home buying process, let's dive into pre-approval letters.
A pre-qualification letter is given by a mortgage lender to a potential buyer. A pre-qualification letter is when a lender verbally asks borrowers financial questions such as gross income and down payment funds available. Based on this information, and after checking credit scores, lenders can issue a pre-qualification letter to a buyer stating how much the buyer can potentially borrow. A pre-approval letter goes into more detail than the pre-qualification letter process. During the pre-approval process, mortgage lenders will ask for borrowers to submit pay stubs, federal tax return documentation, W-2's, and bank statements. Then, based on this documentation, lenders then provide a pre-approval letter to the borrower with an amount the borrower can use to purchase a home. Since the pre-approval process is more in-depth, sellers prefer seeing pre-approval letters.
As stated previously, it was customary for buyers to provide either a pre-qualification letter or a pre-approval letter when submitting an offer. This is to ensure the seller that the buyer is able to pay for the home. However, because of Coronavirus, sellers are understandably wanting to limit the traffic into their homes. Sellers are preferring to open their home up to qualified, serious buyers. If a buyer goes through the pre-qualification or pre-approval process, sellers believe those buyers to be both qualified and serious enough to purchase the home. Also, since the market is hot for sellers, many homes are going into multiple offer situations. Requesting pre-approval letters from buyers to confirming a showing reduces allows sellers to focus on the more serious buyers.
When purchasing a home, the buyers should be prepared by securing a pre-approval. At Tyre Realty Group, our participating lender is Grant Barker with Atlantic Bay Mortgage Group. As the top sales team in Eastern North Carolina, it is important for our agents to work with a fast, efficient, and client-friendly lender to help our clients. With Grant Barker and Atlantic Bay Mortgage, TRG has found those qualities plus many more! Contact our office for more information and to get your home buying process underway!