How to Pre-Approval Letter
If you're looking to buy a new home, it's important to start by obtaining a mortgage pre-approval. This is a letter from a lender indicating that you're eligible for a mortgage for a specific amount, based on factors such as your credit score and income.
This article will provide comprehensive information about mortgage pre-approval letters, including their functionality, significance, and expected process.
How to get a Mortgage Pre-Approval Letter?
When getting a mortgage preapproval letter, you will need to get preapproved for a mortgage. EquiFund Mortgage offers an online mortgage pre-qualification and preapproval that issues same-day mortgage pre-approval letters.
You can use the online mortgage app to get preapproved and we will send you a mortgage preapproval letter. When you use the mortgage app only takes 3 minutes to getting preapproved. The app will verify eligibility, and when you upload your income documents we will issue a soft pull credit report mortgage pre-approval which does not affect your credit score.
Listed below are 6 simple steps to get a mortgage pre-approval letter online.
No credit pulls, spam calls or emails. Just stupid low rates.
Get Pre-Approved or Try the Mortgage Calculator.
6 Simple steps to get a Mortgage Pre-Approval Letter
1. Gather your information: Annual income, monthly debts, Fico credit scores, list of assets
2. Submit an online mortgage application: Answer each question to the best of your knowledge.
3. Find and select the lowest rate and fee mortgage: Choose the loan that favors your budget
4. Upload your income and asset documents: You will be provided a list online of documents to upload.
5. Contact EquiFund to review and confirm: Contact our Loan Originators who can answer any questions you have
6. Receive your Verified Mortgage Pre-Approval Letter: Pre-Approval Letters are issued in the same day or 24 hours.
What are the required documents to get a mortgage pre-approval letter?
When you get preapproved our mortgage app will calculate your verified income and assets to ensure you receive a verified mortgage preapproval and letter.
Therefore, you will need to submit documents that verify your income and assets. Below is a list of the required documents for loan pre-approval.
- Last 2 Years IRS Tax Returns
- 1 Month most recent paystubs
- Copy of pension awards letters
- Copy of child support documents
- Copy of Social Security and or Disability Income
- 2 Months bank statements verifying down payment monies
Rates 1% lower than most banks at Equifund Mortgage® | See real pre-approved loan offers.
Get Pre-Approved Online. See Loan Offers in 3 minutes.
Apply for a home loan: Use the Online Mortgage Application to get preapproved in the same day.
EquiFund Mortgage provides an online mortgage pre-qualification and pre-approval app that will compare multiple lenders to identify the lowest rate and fee home loans in under 3 minutes. Once you identify your preferred mortgage loan, you can upload your income and asset documents.
When EquiFund receive and review your income and asset documents, we will issue a pre-approval using a soft pull credit check which does not affect your credit score.
Does this online mortgage preapproval app run a credit check?
No, on the first part of our application the online mortgage application will issue a prequalification without credit. When you select your lowest rate loan, and upload your documents, EquiFund will verify income and asset documents to confirm eligibility.
Lastly, once we have verified income and assets, and with your authorization we will use soft pull credit report to complete your mortgage preapproval.
Can You Change Loan Types After Getting Pre-Approved?
If you are getting preapproved for a home loan and later decide you want to change your loan program, you can request a change in loan program.
The mortgage provider will update the loan application based upon your request to confirm eligibility and identify any changes to the eligible loan amount.
You will not have to submit any additional income and asset documents to change loan programs. The lender will simply update the loan application and re-verify eligibility for the selected loan program.
This mortgage app allows applicants to monitor rates and loan programs even after they have a preapproval letter.
Can I calculate new loan options after receiving a preapproval, to find better home loans to consider?
Yes, you can continue to rerun your home loan application by logging into equifundmortgage.com and selecting "see more options" that is shown in the drop down menu, under your name.
You should not need another soft credit report inquiry unless the initial home loan application is greater than 60 days old. The soft credit report inquiry will not hurt or affect your credit score.
The process of getting preapproved affords you this often overlooked opportunity to get a lower interest rate and or closing cost on your next home loan.
What If I Find and Select another Loan Program with better terms?
If you identify a better rate and fee home loan, you will need to click select, Our administrative staff will be notified and will re-issue a new verified preapproval letter based on your updated changes.
What’s Included in a Mortgage Pre-Approval Letter?
A mortgage pre-approval letter typically includes the following information:
- Loan Amount: The amount of money the lender is willing to lend you.
- Interest Rate: The interest rate you'll pay on the loan.
- Loan Term: The length of time you'll have to pay back the loan.
- Type of Loan: The type of loan you're preapproved for (e.g., fixed-rate, adjustable-rate, FHA, VA, etc.).
- Expiration Date: The date when the pre-approval letter expires.
How Long Does It Take to Get a Pre-Approval Letter?
Equifund Mortgage offers same-day mortgage preapprovals and will complete the request in less than 24 hours. Non-automated mortgage lenders may take longer. The process of getting a pre-approval letter can vary depending on the lender and the complexity of your financial situation. The industry average is approximately 48-72 hours.
To get a preapproval letter, you will need to provide your lender with documentation such as tax returns, bank statements, and pay stubs. The lender will use this information to verify your income, assets, and creditworthiness. They will also likely pull your credit report and review your credit score.
Once the lender has all the necessary documentation, they will begin the underwriting process. This involves reviewing your financial information and determining how much you can afford to borrow. The lender will then issue a preapproval letter stating the maximum loan amount you are qualified for.
Unlike EquiFund Mortgage, some lenders may offer expedited pre-approval services for an additional fee, which can reduce the processing time to as little as 24 hours.
It's important to note that a preapproval letter is not a guarantee of a loan. The lender will still need to verify your financial information and conduct an appraisal of the property you want to purchase before approving the loan. Therefore, it's best to start the preapproval process well in advance of when you plan to make an offer on a home.
What Is a Mortgage Pre-Approval Letter?
A mortgage preapproval letter is a document provided by a lender that confirms they have evaluated your credit history, income, and other financial information and are ready to lend you a specific amount of money. The letter typically outlines the loan amount, interest rate, and other loan terms.
The mortgage preapproval letter is usually valid for 60 to 90 days. It's essential to understand that having a pre-approval letter does not guarantee that you will receive a mortgage. After selecting a home to buy, you must go through the complete underwriting process to obtain final approval.
Rates 1% lower than most banks at Equifund Mortgage® | See real pre-approved loan offers.
Get Pre-Approved Online. See Loan Offers in 3 minutes.
Can I get a mortgage preapproval letter with a mortgage prequalification?
To receive a pre-approval letter, you must apply for a full mortgage preapproval because mortgage preapproval and prequalification are not the same things, even though they are frequently used interchangeably.
Prequalification is a preliminary step that gives you an estimate of how much you may be able to borrow based on your income, debts, and assets.
It’s often done online using a mortgage prequal calculator or over the phone, and typically doesn't require documentation.
Pre-qualification can help you understand your financial situation and what you can afford before you start house hunting.
It can also help you identify any potential issues that may need to be addressed before you apply for a mortgage pre-approval.
A pre-approval is a more in-depth process that involves the lender reviewing your financial information, pulling your credit report, and verifying your income and assets.
A pre-approval is a more accurate estimate of how much you can borrow and can strengthen your offer when you make an offer on a home.
However, keep in mind that pre-qualification is not a guarantee of a pre-approval. Even if you are pre-qualified, a lender will still need to verify your financial information before issuing a pre-approval letter.
What is the difference between a mortgage prequalification vs. pre-approval?
A mortgage prequalification does not require a review of your income and asset documents. Moreover, in most cases homebuyers can use a mortgage pre-qualification calculator to get a rough idea of eligibility and loan terms.
A mortgage pre-approval is the process of submitting income and asset documents along with a review of the applicant's credit report in order for the lender to issue a mortgage pre-approval letter.
Why Get a Mortgage Pre-Approval Letter?
Most home sellers and real estate agents will require that your preapproved before they entertain any offers to purchase the home. Therefore, it is important to obtain a mortgage pre-approval and preapproval letter at the beginning of your home shopping journey.
3 benefits to getting a mortgage pre-approval letter:
- Knowing Your Budget: A pre-approval letter lets you know how much you can afford to spend on a home. This can help you narrow down your search and avoid wasting time looking at homes that are outside of your budget.
- Making Offers: Having a pre-approval letter can make your offer more appealing to sellers. It shows that you're a serious buyer and have already gone through the pre-approval process.
- Streamlining the Buying Process: Getting preapproved for a mortgage can help streamline the buying process. Once you find a home you want to purchase, you'll be one step ahead in the mortgage application process.
Should I get multiple mortgage pre-approval letters?
Yes, it is a good idea to compare real loan pre-approval offers. However, applicants should obtain all of the multiple mortgage pre-approvals from different lenders within the safe window of time, so their credit score does decrease.
Credit bureaus give credit applicant's a reasonable period of time to shop for a mortgage. The safe window ensures that the applicant's credit score will not be affected by responsibly shopping for a loan.
Equifund mortgage provides a multi-lender online mortgage pre-approval service that allows applicants to receive multiple mortgage pre-approvals all within one simple online application.
No credit pulls, spam calls or emails. Just stupid low rates.
Get Pre-Approved or Try the Mortgage Calculator.
Things that can derail a deal even after I have a pre-approval mortgage letter.
Several things can derail a deal even after you have a pre-approval letter, including:
- Changes in your financial situation: If your financial situation changes significantly (e.g., you lose your job), your lender may revoke your pre-approval.
- Changes to the property: If the property you are interested in purchasing has significant issues (e.g., it is in a flood zone), your lender may not approve the loan.
- Appraisal issues: If the home does not appraise at the value that was used to determine loan eligibility for the pre-approval.
Pre-Approval Letter FAQs
Is a pre-approval letter legally binding?
A pre-approval letter is not a legally binding document but rather an estimated amount of money that a lender may be willing to lend based on your financial situation.
How long does it take to get a pre-approval letter?
The amount of time it takes to receive a pre-approval letter can differ based on the lender and the borrower's financial circumstances. Generally, the procedure can take anywhere from several hours to multiple days. The borrower is usually asked to submit various documents, such as tax returns, bank statements, and pay stubs.
The lender will evaluate all of the necessary information and conduct a credit check before issuing a pre-approval letter.
Is a pre-approval letter legally binding?
A pre-approval letter is not a legally binding document. It only shows that a lender is willing to lend you a certain amount of money based on the information you provided. Although it helps you estimate how much you can spend on a home, it doesn't guarantee your mortgage application's approval.
Rates 1% lower than most banks at Equifund Mortgage® | See real pre-approved loan offers.
Get Pre-Approved Online. See Loan Offers in 3 minutes.
Do I have to commit to the lender that provides a pre-approval letter?
You are not required to use the lender who gave you a pre-approval letter. It's wise to explore and compare rates and terms from multiple lenders before selecting one. Remember that each lender has their own standards for determining your ability to qualify for a mortgage, so you could be approved by one lender but not another.
Conclusion of Mortgage Pre-Approval Letters
Obtaining a pre-approval letter is an important step when purchasing a home. It provides a clear understanding of your affordability range and enhances your chances of being selected in a competitive market.
The consumer should leverage the age of automation and seek out a streamlined online fully automated mortgage pre-approval provider that can generate loan pre-approvals from several lenders with just one application.
But remember, a pre-approval letter doesn't guarantee mortgage approval.
It is important to keep in touch with the lender throughout the home buying process to ensure that you can obtain the necessary mortgage to purchase your desired home.
