Get pre-approved to buy a property is useful for a couple of reasons, including:
- Knowing your credit and being aware of any potential issues.
- Knowing your maximum spending ability vs. your ideal spending budget is good to consider.
- Having a pre-approval letter can reassure the seller that you can qualify for the loan amount.
Part of the AAR Residential Resale Real Estate Purchase Contract includes that an AAR Pre-Qualification Form is attached and is generally completed by the lender you plan to get financing with. This form notifies the seller if the lender has received documentation on your income, down payment/reserves, and if they have obtained a Tri-Merged Residential Credit Report qualifying you for a loan amount. It is important to get as much information to the lender that you can, because typically the seller will use this information when vetting buyers, and before they accept any offers on a property.
What is the difference between pre-qualified and pre-approved?
What do you need to get pre-approved?