A prequalification loan letter is not as good as a preapproval loan letter because the information provided by you to the lender is not verified. You basically let them know your income and debts allowing the lender to come up with a quick estimate of how much you can borrow. They would normally apply the 43% debt-to-income rule for the estimated amount.

A prequalified loan letter does not commit a lender to your requested amount. Sellers and real estate agents will acknowledge the prequalification letter, but will likely put the buyer in the same group as someone without any prequalification letter.

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