Don’t have the cash to purchase a home? Then you may need a pre-qualification letter from your lender before you even start the search for a new home.
The pre-qualification letter will show how much home you qualify for and the type of financing you are qualified for (FHA, Conventional, VA, etc.)
Did you know that the seller determines what kind of financing can be done on the purchase of their home?
FHA, VA, THDA and other types of loans will have criteria that the home must meet. These are often safety concerns. Many times a seller does not wish to pay for or make these changes so therefore they do not want to allow these types of financing on the home and will only accept Cash or a Conventional loan.
If you are only pre-approved for an FHA and/or a VA loan there is no need to be looking at homes that do not offer these types of financing.
Looking for an inexpensive or a fixer upper? Better have cash or be prepared to finance conventionally. These type of homes sometimes do not even allow FHA or VA because they are being sold “As is.” This means they are not going to fix anything for you and worse, if you are going FHA or VA then you have to pay to fix it before the loan can be approved.
Some homes require a pre-approval letter as a condition to even look at your offer.
Looking around on the Internet for a new home can really be a waste of time if you do not have a pre-approval letter because it is sometimes required just to even make an offer on the home!
Sellers do not want to waste their time negotiating or considering an offer from someone who can not purchase. Getting pre-approved is the very first step before even looking to purchase a home.
Realtors and For Sale by Owner sellers often will not even show you the home without a pre-approval letter.
Get a pre-approval letter.
Getting pre-approved is Step 1 in shopping for a new home. Even if you’ve purchased in the past your financial standing may have changed in the past few months.
Knowing how much home you can buy can greatly reduce the many options that are available to you.
Getting pre-approved is a fairly simple process and if you live in the Chattanooga area, we have a few lenders listed on our resources page that can help you get started.