If you’re a first-time buyer, you might not be familiar with the mortgage pre-approval process. But don’t worry, we’re here to get you up to speed. Pre-approval doesn’t have to be an intimidating, confusing real estate term that throws a cloud up over your buying process—it’s actually an incredibly useful way to get a step ahead of the game!
Get to know a little more about what pre-approval is and why you should consider it, and let our team know if you have any questions.
What is Pre-Approval?
Pre-approval is essentially getting approved for your mortgage loan before you make an offer on a house. To get a pre-approval, you’ll need to complete an official mortgage application, which means you’ll need all of your documentation ready to go. Lenders will use this information to run a check on your financials and credit, then “pre-approve” you for a certain loan amount. You’ll also get a solid idea of what your interest rate might end up being.
Why You Should Get Pre-Approved
Getting pre-approved for a mortgage loan for your home is a wise idea because you’ll be in a better position in which to negotiate with a seller. When a seller knows that you took the time to make sure your finances are in check, they’ll feel much better about moving forward with a sale. In addition, some real estate agents won’t even work with a buyer until they’ve received pre-approval.
What You Gain from Pre-Approval
When you meet with a lender, you’ll provide some general financial information to determine a home’s price that best suits your ability to pay, as well as your comfort level. By doing this, you’ll be able to:
- Know what your house payment will be prior to your purchase.
- Spend quality time only looking at the homes you can afford to buy.
- Choose the best loan without the pressure. In today’s market, you’ll have many loan options in which to choose, and your lender will explain each and give recommendations as to which one suits your situation best.
- Know what your estimated closing costs will be.
- Relax and enjoy your home buying experience.
As a final note, it’s also worth considering taking one extra step and getting full loan approval. It’s an excellent approach to your new home purchase! If you are interested in seeking a pre-approval letter, please contact us, and we will direct you to a local mortgage lender.