If you’ve been thinking about buying a new home in the near future, it’s a good idea to get pre-approved for a mortgage loan. Getting pre-approved before you go house-hunting makes the whole process easier in the end.
What is a mortgage pre-approval?
House-hunting before being pre-approved for a mortgage is like buying a car before you know how to drive. The pre-approval process for a loan involves the verification and approval of your personal and financial information before you shop for a house. You will need to provide your bank statements, tax records and all the information you would normally provide when applying for a mortgage. This will determine if you’re even qualified for a home loan. If you do qualify, your lender can tell you the maximum loan amount you would be allowed and you can look for a home that fits into that budget. Once you find the perfect house, you would take that information back to your lender and begin the final approval phase.
Benefits of a pre-approval
Being pre-approved for a mortgage:
- Saves time and disappointment – It’s disappointing to spend weeks looking for a house in a certain price range only to find you’re approved for a lesser amount. Pre-approval gives you an idea of what price range you can afford.
- Pre-approval can identify any problems you may have with your credit, giving you more time to correct them.
- Real estate agents are more likely to work with someone who is pre-approved for a mortgage loan. They don’t want to waste time showing you houses you can’t afford.
- When a seller has several offers, they are more likely to go with a buyer who is pre-approved for a mortgage loan rather than a buyer who doesn’t know if they’re even qualified to get a loan.
Being pre-approved for a mortgage is a way to speed up the loan process by taking care of the necessary paperwork and verification process beforehand. Your lender isn’t committed to giving you a loan until you’ve found a house you’d like to buy and the necessary information they need is confirmed. It gives both you and your lender an idea of what you’ve got to work with, making the buying process easier and quicker for you both.
If you need further information about pre-approval or other options, please contact us today!