In competitive price ranges, sellers compare offers by how likely they are to close. A strong preapproval letter answers that question before it is asked.
Prequalification versus preapproval
- Prequalification is an estimate based on what you tell the lender.
- Preapproval means the lender has reviewed your credit, income and asset documents. It carries much more weight with a listing agent.
What lenders typically ask for
- Two years of W-2s or tax returns
- Recent pay stubs
- Two months of bank and investment statements
- Explanations for large deposits
Comparing lenders
Get Loan Estimates from at least two lenders on the same day so the rates are comparable. Look at the interest rate, the lender fees in Section A, and whether points are being charged. A local lender who answers the phone on a Saturday can matter as much as a small rate difference.
Programs worth asking about
The NC Housing Finance Agency offers down payment assistance for eligible buyers, and some employers in the Triangle have their own homebuying benefits. Ask your lender which programs you qualify for — eligibility rules change, so confirm current terms directly.