(619) 977-7777 kevin@reef-realty.com

Prequal Letter vs Preapproval Letter

A Prequalification Letter (Prequal letter) is a letter written by a mortgage broker / lender intended for use between the Buyer and the Seller in a real estate transaction. The Buyer traditionally will submit a Prequal Letter with an offer to purchase a property indicating to the Seller that the Buyer has already talked to a mortgage broker, answered many personal financial questions and both his front-end and back-end DTIs (Debt-to-Income Ratios) have been calculated and determined to be within traditional lending guidelines with regards to the Buyer’s credit, income and assets. This letter is designed to give the seller comfort in knowing that this particular Buyer initially meets the necessary borrowing guidelines and should qualify for a new home loan.

Do not confuse a prequal letter with a Preapproval Letter. A Preapproval letter is different in that it is more than a cursory examination of the buyer/borrower’s credit, finances and DTIs. The buyer/borrower will have already gone through the formal under-writing process and both the buyer/borrower and the property have been approved by the bank. A Preapproval Letter is a commitment from the bank to make the loan according to the terms of the purchase agreement.

See a sample Prequalification Letter below:

Prequal_Letter_Sample

The 10 most common Title issues

These are 10 most common title issues that could cost you money down the road and possibly put your ownership rights at risk.  They could also blow up your current real estate transaction.  Make sure your agent reviews and explains your title report with you....

how much is my home worth

How Much Is My House Worth?

How Much Is My House Worth? It’s a simple question—one that many tech companies want you to believe has a simple answer. Unfortunately, nothing could be further from the truth. There’s a quick way to get a number, and then there’s the right way to determine your...

Government bans from medical debt from your credit report

News ain’t always sexy but still very relevant to many. Did you know…. According to the Consumer Financial Protection Bureau (CFPB), there is over $88 billion in outstanding medical bills currently in collections across the nation—a number that has significant...

Home Warranty vs. Homeowner’s Insurance

Is a Home Warranty the Same as Homeowners Insurance?   A home warranty isn't a replacement for homeowners’ insurance. A home warranty covers service, repair, or replacement of your home’s major systems such as HVAC, electrical, and plumbing.  It can also cover...

How the wildfires affect your Homeowner’s Insurance

In light of the recent wildfires in L.A., I found the perspective in this video blog very interesting.  Unlike so many baseless opinion editorials, this one seems to contain mostly fact-based comments about the lack of fire preparation in Southern California.  Very...

Title Insurance: The Essentials

What Is Title Insurance? Title insurance shields lenders and buyers from financial hits caused by title defects on a property. Two main types exist: Lender’s Title Insurance — Required by lenders, paid for by buyers, and protects the lender. Owner’s Title Insurance...

Rate buy-down

Real Estate Financing: Making an Offer with Rate Buy-Down When buying a property, buyers are often looking for ways to reduce their monthly mortgage payments, especially in an environment of rising interest rates. One strategy gaining traction is the seller-paid...

PB Monstrosity

I've lived in the Pacific Beach/La Jolla area since 1984, and I love this community. In those 40 years, I’ve seen a lot of changes—mostly good, but a few not-so-great ones too. However, this latest proposal is downright absurd.   A 239-foot, 22-story high-rise...

NAR Settles Lawsuit

                                                                                                                                                                                                                                                                         ...

“Rates a Dropping”

                                                                                                                                                                           October 2024  The Fed finally dropped Interest rates.  Is now the time to sell your home or...