I agree with Len in that it will really depend on the seller. A pre-approval letter is not anything but a letter from the lender saying they have reviewed you information and they are giving a preliminary approval for a loan for X amount. I will traditionally not give a pre-approval letter to a seller with the offer to purchase if it has the amount approved for on it unless it is less then the offer allowing for a downpayment. For negotiation purposes I want the seller to think this is all my client can afford. I have taken out the amount before or simply requested several letters from the lender in order to not give them too much information.

Most definitely you need to get a "good faith estimate" of your closing costs. Your interest rate will be given to you when you actually apply for the loan. Now in some cases lenders will offer (for a fee) to "lock" you into an interest rate if you think that they are going to go up. Now these locks usually only last 30 days. So you need to be ready to start putting in offers on homes if you are thinking of locking a rate in. Always ask if that is everything just to make sure there are no hidden fees or suprises at closing. A good buyers agent can help you with all of that and even help you with providing you with a list of lenders that they use frequently with good results. So if you have not already I suggest you find a good buyers agent to help you navigate this transaction since they can help with all of these questions.

If you have any questions or need any help feel free to contact me through my profile here on Trulia or through one of my websites listed below.

Hope this helps,

The Pre-Approval Letter should be based [at the least] on your Lender's having actually reviewed the Debts on your Credit Report, they have obtained your Credit Score, and they have verified your Income by looking at your Tax Returns or Pay Stubs or other Documents.

The Lender has [most likely] asked you for a Proof of Funds Letter or a Bank Statement indicating that you have the necessary down payment.

The Letter should state the Purpose of the Loan, the Loan Type, the Loan Amount, the Down Payment, the Interest Rate, the estimated PITI Payment, the Property Address, any Seller Contributions, and the length of time that the Letter is valid (expiration date).

Someone below alluded to this important point - do not have a Pre-Approval Letter that states a higher amount of money than your Offer Price. Otherwise (duh) you can fully expect to be counter-offered. Most Lenders will provide you an Approval Letter that states your Offer Price. If you later move on to another higher-priced property, they will issue a new Letter for you stating the higher price (as long as you qualify).

The aforementioned Proof of Funds letter - many Sellers will want to see this, especially if a large down payment is involved.

Your Broker or your Lender can give you additional advice.

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Best wishes,
Fred
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Who the letter is for will really dictate what information you'll want included. If the letter is to be included with an offer to purchase, it should be just enough info to satisfy the seller. That may vary from state to state. You should consult a local real estate professional for specifics for this type of letter.

If the letter is for your real estate agent, it should include your loan to value, and maximum loan amount. This could help the agent to structure your offer on a home and insure you are looking at homes that fit your budget.

The letter for yourself, in addition to all the above, should include rate, term, what the lender fees are, whether mortgage insurance will be required (if so, how much it will cost), and a list of all credit stips the underwriter is going to ask for.

Understand that the first person you speak with is called an "originator." Their job is to bring in as many potential clients as possible. Most will do a cursory review, meaning, they ask you info and base a "pre-approval" off of your answers. To make it a bonafide approval, all the info has to be verified. If you cannot verify it to the originator, your loan will never make it to the final stage, or to the person who ultimately has the authority to approve your mortgage, the underwriter. It is crucial that you work with someone who is very astute and/or experienced.

An agent today had to call me to tell me that her client was turned down at the last minute on a home we had expected to close on this afternoon. The originator overlooked a tax lien that ultimately cost the buyer their loan. And since the buyer was responsible for my client's home being off the market for 42 days, they are losing the $2,000 in earnest money they had put down. While this does not happen real often with my folks, it does happen so you have to be careful who you work with. Look at it this way. All these people are working for you, so treat every initial conversation as an interview. Read up a little so you will know what questions to ask them. And if what they tell you sounds to good, it may be.

Good luck and happy house hunting!

The pre-approval letter that you as the buyer presents to the seller should state some basic info: That you are qualified to purchase the property at 123 Main, not the amount you are qualified to purchase. If you tell them how much you qualify for, they may not want to sell for a lower amount since they know you can afford to purchase the property. It's always good to say if the pre-approval is based on credit report being pulled and income/assets being verified.

A pre-approval / pre-qualification letter is basically meaningless, all it really means is you have talked to a lender and they've given basic approval that you'll be able to get a loan. It's meaningless until you get the loan into the underwriter's hands and they determine if you'll get the loan or not.

Depending upon your areas request. Most would like to have the amount your approved for, an address, buyers info, lenders info, etc...

Thanks for an answer Phil. What additional information would you recommend I ask for?