Fort Collins and Colorado Real Estate – What Is A Lender Letter?

A Lender Letter, in many situations, is an essential piece to buying real estate in Fort Collins and Colorado

Before we set out to buy real estate in Fort Collins and the rest of Northern Colorado, we’ll want you to have a “Lender Letter” in hand (digital copy is fine). So what is the lender letter?

Pre-Approval of financing, and how much you could spend

Lender letters are basically a letter from your lender saying that they have run your numbers and looked at your situation, and they have approved you for funding up to a certain amount. Since it is coming from the lender, it is further proof that you actually have access to the monies you will need to buy a home.

People who are selling real estate in Fort Collins and Colorado use these letters as a part of their vetting process. In recent years, we have been in a seller’s market, and this made multiple offer situations fairly common.

Multiple offers in Colorado real estate

Multiple offers go like this. A home is put on the market. It is an attractive home to more than one buyer. Over a short span of time, the seller receives more than one, or two offers. From those offers, they must choose. If you don’t have a lender letter and others do, your offer will not be as attractive and therefore might not be considered or accepted.

An offer is one thing, closing on that offer is another

Offers come with the promise of earnest money and the supposed ability to close on that offer. However, people have been known to offer terms that they cannot make good. So, smart sellers who are represented by astute Realtors® or real estate agents, have a vetting process. They vet the offers by checking the terms and conditions and any proof of validity that accompany the offer. The lender letter is one form of proof that the buyer can actually go through with the purchase.

Lender Letters Are Part of the Process

You don’t have to do anything special in order to be supplied a lender letter. It is part of the process used by any credible lender, and they will be expecting you to ask for one. After they approve you for financing, simply ask them to send the lender letter to you and your Realtor®.

See an example of a Lender Letter here.Lender Letter Example

Lender Letters Contain:

Amount

Such and such buyer is approved for up to (example) $500,000.

Lender Letterhead

The lender letter will come on the loan originator’s official letterhead, giving credence to the document.

Loan Officer’s NMLS Number

Lender licensing is a difficult process. After a loan officer completes the licensing process, they are given an NMLS number. This is like their professional signature, and is used to track their activity. A reputable lender protects this coveted status by acting in good faith professionally at all times. In other words, they shouldn’t issue any letters or information that isn’t true, or their status as a loan officer could be in jeopardy.

NMLS – Nationwide Mortgage Licensing System

Loan Officer’s Signature

The cherry on the lender letter is the loan officer’s signature. It verifies that they confirm that they have approved you for the amount stated.

Jamie Laskie - NMLS 1641628I wrote this post with the help of Jamie Laskie of Guild Mortgage NMLS 1641628. She produced the sample lender letter, and she is one of my favorite lender partners. If you have questions, please do feel free to ask her or I about any of it!


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