Preapproval: Strengthen your negotiating power
A preapproval letter from your mortgage lender can be an important tool to strengthen your negotiating power. Sellers and listing agents tend to take offers more seriously when the buyer has been preapproved.
When you have found your dream home, and you are ready to make an offer, submitting a preapproval letter with the offer says you are a serious and committed buyer.
A preapproval letter is based on a preliminary review of your credit information and preapproves you up to a maximum loan amount. Because a preapproval includes a credit check, it’s more powerful than a prequalification letter, which only estimates your potential buying power.
With a preapproval letter, you can confidently shop for a home in your price range, and you are in a position to negotiate an offer – especially when there are multiple offers for the home you want.
As you prepare to make one of the biggest purchases of your life, a preapproval can ensure that you are in a loan program that meets your needs.