A pre-qual letter is a letter from a mortgage lender indicating that a buyer is qualified to obtain a mortgage loan in a particular amount. Pre-qualification letters are intended to give the seller a sense of comfort that the buyer making an offer on his or her home has the financial means to purchase the home. If a seller has more than one prospective buyer interested in his or her home, the purchaser with the pre-qualification letter could have the competitive advantage over the other prospective buyer or buyers. A real estate agent that is representing you as a client works on your behalf. This is one of the main reasons an agent will ask you for this letter before beginning your home search.
Sellers of bank owned/foreclosed properties require a pre-qual letter to be submitted with most all offers. This is another great reason to be prepared.
Sellers should read the pre-qual letters to see if the mortgage lender issuing the letter has done a full credit check and income verification of the buyer.
If you are the purchaser looking to buy a home, talk to your mortgage lender before making any major changes such as employment, or opening any other credit card accounts, etc. This could affect you being able to obtain a loan for a new home.
Article prepared and submitted by Joanna Jackson, sales manager/associate broker with Jackson Realty