Shopping for a home without a mortgage pre-approval is like forgetting to do your homework. Good luck explaining to your real estate agent that your dog ate your pre-approval.
I totally get you. Been there, done that. I’ve been doing mortgages for over a decade, and the biggest problem is not knowing where to start.
Applying for a mortgage pre-approval is the first step when planning to buy a home. A local mortgage broker will examine your financial situation to ensure you pass all the requirements to qualify for a mortgage. This included your income, employment, credit, debts and assets.
Ensure your local mortgage broker is pre-approving you and not simply pre-qualifying you for a mortgage loan. Lenders need to check your credit history and verify your documents in order to pre-approve you. Versus pre-qualifying you by calculating numbers based on a phone conversation and anticipating your credit bureau is in good standing. A pre-approval will also hold an interest rate for a set period of time. If rates go up while you are house shopping, you will still be offered the lower interest rate. A pre-approval carries more weight than being pre-qualified.
Once the pre-approval is complete, you will know how much house you can comfortably afford. This information will help you narrow down your options and save you time. It will also stop you from falling in love with homes that are not within your budget.
When you find a home and write an offer, your pre-approval can help you increase your negation powers. It shows strength and can instill confidence in the seller. Homeowners may accept a slightly lower offer, knowing that the buyers are much more serious and financially secure.
Obtaining the final mortgage approval requires many steps and can be a lengthy process. Having a mortgage pre-approval lets you skip some steps and shorten the approval time. Any unexpected issues or delays are taken care of ahead of time. This will allow you to write a shorter finance condition on your offer, reducing the approval wait time.
Lastly, an experienced real estate agent will require you to have a mortgage pre-approval before they take you home shopping. Real estate agents want to offer you the best service in a timely manner. Mortgage pre-approvals help them accomplish this.
Do your homework and secure a mortgage pre-approval before you start house shopping. Passing the final exam to get approved for a mortgage will depend on it. Educate yourself so your home buying experience is a memorable one.