Buying a place of your own is an exciting time. However, you'll have to narrow down the process before you decide to take the big step. One of the most straightforward steps includes a mortgage loan Pre-Approval. Knowing the basics of the pre-approval process will prepare you for what's to come, and you will know exactly where you stand when it comes to your purchase. Getting pre-approved is a productive step that will strengthen your purchasing credibility and speed up the closing process. If you aren't aware of the importance of loan pre-approval and what to expect from it, then you have come to the right place.
What is a mortgage loan pre-approval?
A pre-approval is a confirmation that you get from a lender that is prepared to lend you some money for your home but hasn't made it final. However, this is a conditional offer that depends on the property's value you want to buy as well as certain other contingencies, including verifying the information given to them and sometimes digging a little deeper into your financials. A pre-approval will allow you to know the maximum available funds, so you can narrow down your search according to your budget, and you can bid with more confidence.. A pre-approval is a valuable first step that will get you closer to your new family home.
The importance of pre-approval
Pre-approvals are essential for various reasons. It will give you confidence when you're going going to place an offer, and it'll show sellers that you're serious when it comes to purchasing and you've already started the important process of getting a mortgage.
Here are some of the reasons why Pre-approvals are essential:
● You'll know how much you can spend. You can house hunt with confidence with your budget in mind.
● Most sellers are looking for buyers with pre-approval. Many sellers might not accept your offer if you don't have a pre-approval first.
● It makes the process go a lot faster. Once you find the right house for yourself, acting quickly to get it can make a bunch of difference. The pre-approval can reduce the wait time for your entire loan to come in because the lender already has a lot of important information and documents in hand.
The pre-approval process
Your mortgage application process usually includes two distinct and essential steps:
pre-qualification and Pre-approval.
Pre-qualification
The pre-qualification process includes sharing your financial information, including debts, assets, income etc. The pre-qualification process can help you understand the approximate loan amount you can expect to be qualified for. Once your information is reviewed, the lender will give you a loan estimate. The pre-qualification process is simple and can be done quickly.
Pre-approval
The pre-approval process is more involved. Once you submit the mortgage application, your lender will require all the information that will be necessary to conduct a credit check history and will review your financial health as well. With a pre-approval, you'll be able to estimate monthly costs and the interest rates you can expect on your loans. The mortgage pre-approvals are usually valid for around 60 to 90 days.
If you're thinking about purchasing a home, reach out to me and I can help guide you in the pre-approval process to be sure we're looking for a house that works for your budget.
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