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The Importance of a Pre-Approval Letter When Buying a Home

If you’re hoping to begin the new year in a new home, you need to get your ducks in a row before you begin house hunting. That’s right: Given the competitive nature of the current real estate market, it’s imperative that you are armed and ready as a buyer. A big part of this process is establishing your financing with a pre-approval letter from a mortgage broker.

The Need for a Pre-Approval Letter

Put simply, a pre-approval letter is an official document that shows that you have the financial means to buy a house. A lender reviews your information as a borrower and shares their approval for a home loan of a certain amount. They will consider and confirm your income, credit score, current debts, and more.

As a home buyer, it’s important that you get pre-approved, not pre-qualified. A pre-qualification is when a lender receives information from a buyer without proper documentation and verification. Given its more formal nature, a pre-approval letter carries a lot more weight.

From the perspective of a home buyer, a pre-approval letter allows you to have a reasonable budget confirmed in advance. It keeps your expectations in check, as you know upfront whether or not you can afford a house. Plus, it saves time and makes it easier to submit an offer to a seller’s listing agent. A realtor may require this document before accepting you as a client.

A pre-approval letter also makes you a more appealing home buyer. It shows that you’re serious about and can truly afford your offer. Some sellers won’t even accept an offer without it. In fact, it can be the deciding factor if a seller receives multiple offers of similar amounts!

To get a pre-approval letter, you need to find a lender you like and trust and complete a mortgage application. Your real estate agent can recommend someone based on their past experiences. Note that it’s often prudent to choose a local lender, as they have a better understanding of the home-buying market in your area.

Our Team at The Urban Dog Group

At The Urban Dog Group, we work directly with Michael Dean, Originating Branch Manager at CrossCountry Mortgage, LLC. “Pre-approval letters are more important than ever right now. In this real estate market, you have more buyers competing with you for a home,” Michael explains. “Therefore, listing agents are more selective about the strength of your financing when considering your offer.”

As a home buyer, your relationship with your realtor and loan officer directly impacts the outcome of your experience. “You want a knowledgeable realtor who can put together an offer that is not just competitive but also protects you as a buyer,” Michael says. “Additionally, you want a loan officer who is available and can confidently discuss the strength of your financing with the seller’s listing agent.”

This market can be intimidating, but with the right team behind you, it doesn’t have to be.

Let The Urban Dog Group help you with your real estate needs. Contact Christine Elias at

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