Documents to Prepare Before Your Home Search

If you’re preparing to start your home search, gathering a few key documents can help. Having them ready makes the offer process faster and smoother, especially if you plan to take out a mortgage.

Understanding Pre-Qualification

A pre-qualification can help you stand out from other buyers. You must work with a lender before making an offer to obtain this document.

What Is a Pre-Qualification Letter?

A pre-qualification letter shows that you are serious about buying and have started the process. The lender issues a letter stating that you qualify for up to a specific purchase price.

Is a Pre-Qualification Letter a Loan Approval?

Remember, a pre-qualification letter is not a loan approval. It is a preliminary assessment based on the financial information you provide, including income, assets, and intended mortgage plans.

If the seller accepts your offer, you must provide additional proof of income, assets, and liabilities to secure final approval. The lender will also require an appraisal of the property. For example, even if you qualify for a $500,000 mortgage, you cannot buy a $450,000 home for that amount unless the property appraises at that value.

Why Pre-Qualification Matters

A pre-qualification letter reassures sellers that you are ready to move forward. Since you have already spoken with a lender and completed the early steps, you are more likely to close successfully. Include your pre-qualification letter with your offer to demonstrate that you are a serious buyer.