5 Reasons You Want To Get Pre-Approved
The very first step on the to-do list when thinking of purchasing a home is getting a mortgage Pre-approval. Please keep in mind that there is a difference between a mortgage “Pre-qualification” and “Pre-Approval.” Prequalification- the lender pulled your credit but did not verify the information on your application. A Pre-approval means the lender pulled your credit, verified income, reviewed bank statements to source the down payment and ran the application through the Automated Underwriting System (AUS) or had an underwriter manually review the file. This process is free with most reputable lenders and doesn’t require a commitment from you as the buyer. Here are some reasons you’d want a Pre-approval before embarking on your house hunting journey.
Your Pre-approval determines your buying power. It tells you and the seller how much house you can afford. With a pre-approval, you’ll have an idea of your monthly mortgage payment (taxes and insurance should be estimated). It’s a good idea to know what your monthly housing budget is before finding a home.
Once you’re pre-approved, the lender can inform you of the different mortgage programs and financing available based on your specific application/scenario. You’ll find out the requirements and down payment needed for each program and hopefully, make an educated decision on which program is best for you.
The seller is more likely to take your offer serious if you have a Pre-approval letter. Also, if you find yourself in a multiple offer situation, it could help you win the deal because the seller knows that your mortgage is pretty much secure if the house/appraisal is in good shape. This is, of course, assuming nothing in your credit application changes before closing.
You don’t want to find a home, fall in love with it, only to find out someone else submitted an offer before you or worse you can’t get a mortgage to buy it.
It will save you time. Once you find a home, you’ll notice there is a deadline for everything (inspection, appraisal, mortgage commitment-to name a few). If you have a pre-approval, you’ll already have or know what to expect during the process.
I’ve worked with many reliable and experienced mortgage loan officers. I’ll be happy to recommend a loan officer with confidence. Let me know if you are looking for a knowledgeable loan who will also provide customer service that is second to none.