Verified Approval Letter

Definition of "Verified Approval Letter"

Written by

Keith Sippel

Century 21 Affiliated First Realty

You’ve put your home on the market and are receiving offers. The next logical step is to sell your house to the buyer who offers you the highest amount of money and start the closing process. But don’t rush into selling too quickly. You might want to sell to a buyer who makes an offer backed by a Verified Approval Letter (VAL).

Do you need clarification on what a Verified approval letter is or why it is important? Let me explain it and show you why a VAL matters to sellers. 

What is a Verified Approval Letter?

A Verified Approval Letter is a formal document from a mortgage lender, specifically Rocket Mortgage,  to a potential homebuyer. Unlike a traditional pre-approval letter based on a preliminary review of the borrower's financial information, a Verified Approval Letter signifies a more rigorous evaluation process.

It indicates that the lender has verified the borrower's financial documents, income, assets, and creditworthiness to a greater extent, providing confidence in the borrower's ability to secure financing.

How does a Verified Approval Letter work?

Obtaining a Verified Approval Letter involves thoroughly assessing the borrower's financial profile. Lenders verify the borrower's income through pay stubs, tax returns, and other relevant documents to ensure they have the means to repay the loan.

The borrower's assets, such as bank statements and investment accounts, are verified to confirm their ability to cover the down payment, closing costs, and reserves. Lenders inspect the borrower's credit history and score to assess their creditworthiness and the likelihood of repaying the loan on time.

The borrower's financial information undergoes a thorough underwriting process, during which a loan officer reviews the documents, assesses risk factors, and determines the borrower's eligibility for a mortgage loan. Once the lender completes these steps and is confident in the borrower's ability to secure financing, it issues the Verified Approval Letter.

Why is a Verified Approval Letter important for sellers? 

When a buyer presents a Verified Approval Letter, it's a sign that they mean business. They've taken the time to review the approval process, showing they're serious about buying your home. It filters out the window shoppers from the serious home buyers.

Imagine you're selling your home, and you get an offer from someone who still needs to start the mortgage process. It's like holding your breath and hoping they'll be able to secure financing. With a Verified Approval Letter, you can breathe easy knowing that the buyer has already crossed that hurdle.

Time is money, especially in real estate. When you have a buyer with a Verified Approval Letter, the closing process tends to move more quickly. Since a lender has already evaluated them, there's less risk of delays due to financing issues.

Selling a home can be stressful enough without worrying about whether your buyer will be able to secure financing. A Verified Approval Letter provides peace of mind, knowing that the buyer is financially capable of closing the deal.

A Verified Approval Letter is like having a stamp of approval from a trusted source. It reassures sellers that the buyer is serious, qualified, and ready to make a move. So, if you're considering selling your home, keep an eye out for those golden letters—they could make all the difference in your selling journey.