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NMLS: 253889 - DRE: 01450808
7 Items to check for in a pre-approval letter
7 Items to check for in a pre-approval letter
A mortgage pre-approval letter is a document from a lender confirming their willingness to lend you a specified maximum amount of money.
A pre-approval letter gives the seller and agents involved a better sense of security and confidence that the purchase contract will close on time, besides should let the borrower understand the exact conditions of the loan amount, down payment requirements and monthly payment, which includes principal, interest, taxes, insurance and any additional mortgage insurance premiums.
Here are the 7 items you need to check upon receiving one:
1. Loan amount: base loan amount and probably gross loan amount (FHA, VA, USDA).
2. Status date and expiration date: the majority of pre-approval letters are good 90 days from when credit statement is run.
3. Mortgage type: FHA, VA, USDA, conventional, jumbo.
4. Term: 40, 30, 20 or 15 year fixed, ARM (Adjustable Rate Mortgage); if ARM – 3, 5, 7 or 10 year original fixed period; Interest Only.
5. Occupancy: owner occupied, secondary residence, investmen.
6. Contact info: lender’s name and address
7. Conditions: document and funding requirements prior to acceptance.
When should you apply for pre-approval? It’s best to apply for a pre-approval letter when you’re ready to start house hunting. Getting a mortgage qualification letter prior to looking for a new home with an agent is an essential first step in the home buying process.
If you want to know more about the pre-approval letter, you know you can call me, I will make it simple and safe!
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