While mortgage pre-approval should be a crucial part of the home buying process, buyers don’t always perceive it as necessary or valuable. Let’s cover the basics and the benefits of pre-approval, to help you get one step closer toward your home dreams.
What is mortgage pre-approval?
Mortgage pre-approval is a simple application process that can be completed in person or online to determine if you qualify for a mortgage. Your credit and income information are the main factors in determining qualification. If you do qualify, a pre-approval will also let you know the mortgage amount qualify for.
Why should I get pre-approved?
- Find your house faster.
Mortgage pre-approval will give you a clear picture of the type of home you can afford. You’ll be able to narrow your housing search to homes within your price range and save yourself the heartache of falling in love with a house outside of your price range.
- Know your potential expenses.
With a pre-approval, you’ll have a set loan amount you’ve been approved for prior to property selection. Your pre-approval should also determine how large of a down payment will be needed. In addition, make sure to take into account other potential housing expenses such as a home inspection, fees (realtor, appraisal, filing fees, etc.) and taxes. With all of this information, you’ll be able to make accurate predictions for your housing expenses and mortgage payment.
- Have confidence and move quickly when making an offer.
Some of the best homes can sell quickly and if you don’t have your paperwork in order, another person may make an offer on your dream home before you can. With pre-approval you avoid the hassle and can have confidence that you’re putting in your best offer. Plus, sellers appreciate the assurance that comes with buyers who are already pre-approved for a mortgage.
Subject to credit approval.