Most buyers do not pay "cash" for a home, so they need to obtain a mortgage to finance the purchase. Since you will probably make your purchase contingent upon obtaining a mortgage, the seller has the right to be informed of your financing plans in order to evaluate them. That is one of the major reasons that financing details are included in your offer. A "pre-approval" is always the best preparation.

As part of your offer, you should disclose the size of your down payment.

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Another reason for including financing information in your offer is to protect yourself. If interest rates suddenly become volatile and rise quickly, as sometimes happens, you may looking at a mortgage payment much higher than you anticipated. By putting a maximum acceptable interest rate in the offer, you are protecting yourself from such an occurrence.

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There may be times when, as part of your offer, you request the seller to pay all or a portion of your closing costs, or provide some other financial incentive. One common request is asking the seller to provide funds to temporarily buy down your interest rate for the first year or two.... or for the life of the loan.  Another would be to have the seller pay for "closing costs." Such incentives can help if a buyer is tight on money or pushing their qualifying ratios to the limit.

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Another occasional request is to have the seller "carry back" a second mortgage to help facilitate your purchase of their home. This may be an option in cases when the seller does not need all the proceeds from their sale in order to purchase their next home. There could be some advantages to buyer and seller depending on the terms of the second mortgage.  With today's available creative financing programs this is a rare option. 

Your agent should be able to direct you to reputable mortgage companies.

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If you are one of those rare individuals making a cash offer to buy a home, it makes sense to provide some documentation with your offer that shows you have the funds available.  There are still some minimal costs, for both Buyer and Seller, associated with a cash offer. 

Often a cash Buyer thinks that a Seller will reduce a price drastically for a cash transaction.  This is not always true.  Even thought there may not be a finance contingency,  a Buyer approved for financing results in the same cash to the Seller.

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Your offer should also contain information on what type of financing you have applied for or will be applying for.  The best situation would be for you to have a pre-approval letter "in hand."  The Real Estate Purchase Contract will have a standard clause regarding financing.

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