Pre-approval for a home loan is an estimate in writing of the mortgage amount you will likely qualify for and it is key to the house-hunting process.
Pre-approval works for you and the seller and has 3 Key Benefits:
- You will know exactly how much home you can afford before you start looking and how much, if any, cash is required and what your monthly payments will be.
- You will get the best financing (lowest rates, most favorable terms, and highest quality of service) as a result of establishing a relationship with a preferred lender in the early stages of your search. A good lender stays on top of your home-buying process and can offer you advice such as how to improve your credit score or save for your down payment.
- You can make a stronger offer and beat out the other buyers as a result of being pre-approved. Sellers want to know a buyer can back up their offer with financing and a pre-approval is the best way to do that.
Consider These Two Offers…Which One is the Better Offer?
Buyer A – (NOT Pre-Approved)
- Offer contingent on getting financing with no assurance of loan approval.
- Uncertain ability to secure purchase funds.
Buyer B – (Pre-Approved)
- Offer made with lender’s written Pre-Approval letter!
- Financing GUARANTEED in writing by lender!
Pre-approvals are quick and can often be done online or over the phone in just a few minutes. When you start your home search, be sure to include a recommended lender in the process.