You may have heard real estate professionals tell you that you need a pre-approval letter or a pre-qualification letter to buy a home. Do you know the difference between these letters?
In Texas, we have the conditional qualification letter and the conditional approval letter. When most consumers contact us about getting a letter, they are referring to the conditional qualification letter. One of the quirky things about the state of Texas is that lenders are required to list the documents that they have and have not verified on that letter.
When people contact us saying that they want a pre-qualification letter, most think that we’ll help them with a loan application by pulling their credit and writing them a letter. While that’s fine and we can do that, we must list on the document that nothing has been verified, and that can make it a very weak letter. In today’s highly-competitive real estate market, you need as strong a letter as possible when making your offers.
For that reason, we encourage our clients to take it a step further and provide us with the supporting documents so that we can issue a strong letter for them. Almost all of our clients take us up on that, and we can do it very quickly just as long as they provide us all the info in a timely manner.
Again, there is that second type of letter in the state of Texas - the conditional approval letter. The great thing about this letter is that once you’ve been pre-approved, we can push your file forward to an underwriter for full credit approval. Basically, all of the hard work of the loan is done up front, the underwriter signs off on everything, and, with the exception of getting an appraisal on the property, you are completely done with your mortgage. With all the hard work done up front, the time frame for being under contract is shortened, and the experience is just more enjoyable all around.
If you’re looking to buy and looking for a lender, we’d be honored to serve you. Send us an email or give us a call and our team will get working with you right away.