Why Every Buyer Should Get Pre-approved.
What is the benefit of having a mortgage pre-approval when looking for a house?
There is a difference between a mortgage prequalification and pre-approval. A prequalification is based on the information you verbally give to qualify for a mortgage. A pre-approval is reviewed by an underwriter to be sure your income and assets qualify you to get the loan you are applying for. If you are looking to buy a house, a mortgage pre-approval is the smartest way to get you to your dream home.
Knowledge is Key: A pre-approval gives you an idea of how much house you can afford. We base this amount using a formula that compares your income to your total outstanding debts. This will keep you focused on the big picture and help to prevent being disappointed if you fall in love with a house that is too expensive.
Improve Your Negotiating Position: When a seller is comparing two offers and one of the buyers has been pre-approved, there is a high confidence level that the deal will go through and close sooner. This may help you to win in a competitive bidding situation.
Confidence in Your Offer: Knowing that the key information in obtaining a mortgage has been reviewed by an underwriter will give you, and the seller, confidence that your offer is bona fide.
Keep Your Spending on Track: Having detailed information on your interest rate, closing costs, term and down payment will help you to stay within your monthly budget.
Time is Valuable: Knowing what you can and cannot afford can save you time and frustration in the house hunting process. This will help your realtor find the perfect house in your price range.
Move in Quicker: Having a pre-approval will save you time when you submit your loan for approval. The faster you close, the quicker you can move into your new home!