You need a Mortgage Approval Letter in Hand!

September 12, 2020

You need a Mortgage Approval Letter in Hand!

The most exciting part of the house hunt is the actual hunting process.  That being said, the most important part is the mortgage approval process.  It’s important to have a handle on the financing end prior to actively looking for a home.

There are many reasons to get approved for a mortgage prior to your home search.  When approving a buyer for a mortgage the lender will inform the buyer about the amount the borrower can afford to borrow.  That’s the starting point.  Understandably, not everyone feels comfortable with buying the most expensive home they can afford.  Part of the approval process is figuring what your comfortable monthly payment looks like, and what that means for your target purchase price.  If you’re comfortable monthly payment, including principle, interest, taxes, and insurance (also known as PITI) is $3,000, your lender can tell you the price tag on the home you can afford.  That’s a pretty simple equation:  Down Payment + Mortgage Amount = Price Price.

In this digital age it’s pretty easy to gather the necessary documentation needed for a mortgage approval.  Typically, a lender requests 2 years of tax returns, two months of bank statements, and 2 months worth of pay stubs.  A borrower can upload the documentation to a lender’s website and securely  share their documentation.  The lender will also obtain credits reports and use those to complete qualification process for the borrower.  In an ideal world the lender will have your mortgage approved by the Underwriter at the end of this process.  At that point all you need to do is find the perfect home.

Shopping for a home with a mortgage approval in hand means you’re able to make an offer any home that strikes your fancy.  In a fast moving, competitive real estate market, a buyer may not have time to complete the approval process prior to a seller reviewing offers.  Furthermore, serious sellers and experienced Realtors will not accept an offer without an approval letter or proof of down payment.

If you need a referral to an outstanding mortgage lender please reach out to me for an introduction!  I’ll happily connect you with the right professional.  Happy house hunting!


Recent Blog Posts

Stay up to date on the latest real estate trends.

The DST is Ideal For Aging Investment Property Owners

February 15, 2024

Perch Wealth, Featured in BIZNOW, explains DSTs

Mortgage Rates, Home Values & The Rental Market

September 28, 2022

Mortgage interest rates play a huge role in home values. These rates are now at 2002 levels, up sharply from all time lows in 2021. The average 30 year fixed mortgage … Read more

Out of State Investing

April 7, 2022

Let’s face it… A lot of real estate investors are priced out of California, and prices are continuing to climb. Here is an example. In 2012 an investor could purchase … Read more

Out of State Investing

April 6, 2022

Let’s face it… A lot of real estate investors are priced out of California, and prices are continuing to climb.

Use a Liquidator Instead

March 16, 2022

Market Real Estate specializes in selling inherited properties. Oftentimes our clients have a quite a project on their hands. One of their biggest concerns is what to … Read more

Use a Liquidator Instead

March 15, 2022

Market Real Estate specializes in selling inherited properties.

Pre-Sale Improvements that Add Value

January 6, 2022

We highly recommend a fresh coat of paint. Paint creates a huge return on investment. The “in-style” colors seem to change fairly quickly these days. We went from tans… Read more

Pay Off Your Mortgage Quickly

December 30, 2021

Going back a few generations there was very little credit extended to people interested in purchasing real estate. Fast forward to the first decade of the 2000’s credi… Read more

Appeal of Cash Buyers… Let’s make you one!

December 14, 2021

There is a lot of competition amongst buyers in our housing market. There are simply more buyers than properties available. There also happens to be quite a few buyers… Read more

Let's Talk

You’ve got questions and we can’t wait to answer them.