HOUSE HUNTING TIP: If you have a preapproval letter stating that you are qualified for the mortgage you will need to close the sale, you are in a much stronger position negotiating with a seller. It could be essential if you are in a multiple-offer competition. A prequalification letter may suffice in an area where there is a surplus of inventory of unsold homes. On foreclosures, it is mandatory to submit a prequalification or preapproval letter from a lender with your Purchase Agreement.