When You Should Have a Pre-Approval Letter in the Buying Process

There are two types of letters you can get from a bank when you’re looking to buy a home: a pre-qualification letter and a pre-approval letter. Pre-qualification gives you a ballpark estimate on how much you’ll be able to borrow to buy a home, whereas a pre-approval is more detailed and says exactly how much you will be able to borrow. You should have a pre-approval letter before you are ready to make an offer on a home. 

Why You Need a Pre-Approval Letter to Start the Buying Process

For many first-time buyers, once they get their pre-approval letter from a mortgage banker, the process begins. While you can make an offer on a home with just a pre-qualification letter, it commonly isn’t taken as seriously as the bank hasn’t seen your financials; they just shared what you would qualify for based on the information provided. 

This is why getting a pre-approval letter is an essential first step in the buying process. 

How Long is a Pre-Approval Letter Valid For?

This changes bank to bank, but typically they are good for 60-90 days. So when you are expecting to make an offer to buy a home in two to three months, it’s the right time to get that pre-approval letter. 

And if you don’t find the right home in that window, it’s relatively easy to get a new pre-approval letter as the bank already has most of your information; they just need to verify that it is all still valid. 

Do Realtors Work With Buyers That Don’t Have a Pre-Approval Letter?

Not all realtors work with buyers before they have a pre-approval letter, but we are happy start working with buyers at earlier stages of the buying process. In fact, we have a good network of mortgage brokers that we’ve worked with for decades that we can introduce you to if you need to meet one. 

At the end of the day, buying a home is likely the largest financial transaction you will have in your life. It’s vital that you get expert advice from early on in the process to make sure it goes perfectly and does not cause undue stress; trust us, the home buying process alone will cause enough stress as it is, you don’t need to go through any part of it on your own. 

If you have any questions about real estate in general, we’re here to answer them! Feel free to contact us.