Quote:
Originally Posted by Retiring
The OP asked about being pre-approved and the thread replies are about pre-qualified. I believe the two are oranges and apples. Maybe a retired banker on this board can explain the difference.
If I’m a seller and a buyer comes to me pre-qualified, it means nothing. If a buyer comes pre-approved, let’s talk.
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The " term " which a buyer and seller would be looking for would be what is at least internally called a
" Commitment Letter ". It is the end product of a pre-approval process .
It is usually very straightforward and clearly indicates that the issuing institution is committing to lend up to $X amount and at X rate for X years with a minimum of X% [ usually 20% ] down . And the " commitment" is good until X date .
All in about 3 paragraphs long and accompanied by required Federal and State legal disclosure documents for the Buyer .