Can I Look At A House Without A Preapproval Letter?

Taking a digital tour of a home can be enlightening, but nothing compares to actually walking through a home and seeing it with your own eyes. But some home buyers can feel apprehensive about going through a home without a mortgage preapproval letter in their hands.

So, you might ask this question: Can I look at a house without a preapproval letter? In a word, yes – while a preapproval letter is part of the home buying process, you can tour as many homes as you want without this document. However, if you have one, you will likely have a leg up over other buyers who are looking at homes without a mortgage preapproval. Not only does this important paperwork give you an idea of your budget, but it also indicates to potential sellers that you are a serious customer and worth their attention.

What Is A Mortgage Preapproval Letter?

A mortgage preapproval letter is issued by a mortgage lender after they examine your financial situation. The lender will review factors like your debt-to-income ratio (DTI), credit history, credit score and list of assets.

Armed with this letter, you will be able to show what type of home loan you can take out and the amount of money you can borrow for your home purchase.

It should be noted that this process – sometimes called initial mortgage approval – is not the same as a mortgage prequalification. Why? Because the lender in the preapproval process typically does a deeper dive into your economic situation. A prequalification only takes into account more superficial factors, such as an estimated down payment amount.

What Is A Verified Approval Letter?

If you’re going to get an approval letter, it only makes sense to get one that is truly official. That’s where the Rocket Mortgage^® Verified Approval Letter (VAL) comes in, as it’s an official document proving that your income, assets and credit have been verified by the Rocket Mortgage underwriting team.

If you have a VAL, it will prove to sellers that your finances are in good shape and you’re a serious buyer – even if you’re a first-time home buyer – which could put you ahead of other potential buyers if competition gets fierce.

How Do I Get A Preapproval Letter?

In order to obtain one of these critical preapproval letters, you need to apply for a mortgage. When you take that step, it will expedite the process if you have your financial documentation in order, including:

• proof of income
• employment history
• proof of assets
• credit history
• identification

You will also need your Social Security number, job history, tax returns, bank statements and pay stubs.

There are a few important things to remember in this process: for starters, time is of the essence – a preapproval letter expires within 60 – 90 days. Also, because the preapproval process involves a credit agency pulling your credit, it may affect your credit score.

Do I Need Preapproval To View A House?

No, you don’t need a preapproval letter to view a house since house showings are free to potential buyers. But most real estate agents prefer to work with clients who have a preapproval letter in hand, because it provides insight into the type of properties their clients can afford to buy.

Should I Get Preapproved Before Looking For A House?

It may be tempting to jump into house hunting without a preapproval letter. After all, it can take time, and you want to try to find your dream home as quickly as possible.

What Are The Benefits Of House Hunting With A Preapproval Letter?

Although you don’t technically need a preapproval letter to view a house, it can be beneficial in several ways. They include:

• You’ll know how much house you can afford. It could be heartbreaking to find a house you love only to find out later your budget can’t swing it. When you go through the preapproval process, you will get a better handle on how much house you can afford so you can focus on homes that are serious candidates.
• A letter may speed up the home buying process. If you have a preapproval letter, the whole process will likely go faster because a lender has already examined your finances and qualifying factors.
• Real estate agents are more likely to work with you. When you have a preapproval letter, it means that you will most likely have the financing to pay for a home within a certain price range. This makes you a more serious candidate because real estate agents can focus on showing you homes they know you can afford and that you can make offers on with confidence.
• You’ll save time during closing. Since your lender has already verified your credit, income and other qualifications, this reduces potential delays that could occur during final underwriting.
• Your offer may be more attractive. If you have a preapproval letter when you are bidding on a house, sellers can be assured that you have the finances necessary to purchase their home – creating a smoother closing process for all parties involved.