There is a shortage of homes for sale in the Clearwater Tampa Bay area. Quality homes are selling quickly, many on the first day they are listed. If you are shopping for a home, you need to be ready to move quickly. If a seller has multiple offers, for you to be competitive, you need to demonstrate that you can get the loan to buy the property.

What’s the difference between a prequalification letter and a preapproval letter?

Answer: While there are some legal distinctions, in practice a prequalification and preapproval refer to a letter from a lender that says the lender is generally willing to lend to you, up to a certain amount and based on certain assumptions.

There’s not a lot of difference between a prequalification letter and a preapproval letter. While there are some legal distinctions, in practice both terms refer to a letter from a lender that says the lender is generally willing to lend to you, up to a certain amount and based on certain assumptions. This letter helps you to make an offer on a home, because it gives the seller confidence that you will be able to get financing to buy their home. It is not a guaranteed loan offer.

Don’t worry about which word lenders use. Some lenders may use the word “prequalification,” while other lenders may call the letter a “preapproval.” In reality, lenders’ processes vary widely, and the words they use don’t tell you much about a particular lender’s process. The important thing is that the letter you receive provides enough information for sellers in your area to take it seriously. The best way to make sure that the letter you have will serve its purpose is to ask a local real estate agent.

Lenders usually check your credit when issuing a prequalification or preapproval letter. Many people wait to get a preapproval letter until they are ready to begin shopping seriously for a home. However, getting preapproved earlier in the process can be a good way to spot potential issues with your credit in time to correct them.

Ruth Schoenherr is a mortgage broker who will help you find home loans in the Clearwater, Palm Harbor, Largo, Safety Harbor, St Petersburg and Tampa Bay area. For more information, go to her web site at www.ClearwaterMortgageBroker.net.