The benefits of getting a pre-approval
By obtaining a pre-approval, you can speed up the process of securing a mortgage loan drastically. When you get pre-approved for a loan, you will generally have a lender review your income and credit information in advance and then they will provide a scribed statement that denotes how much you would be eligible to borrow.
The pre-approval process takes only about 24 hours when you can produce all the appropriate proof of income and other required documents readily available. There are many benefits that you can obtain from a mortgage pre-approval. Here are a few points that would help you understand the benefits better.
- Boosted credibility with the seller: It is very important for a seller to consider a buyer who buying a home to be affordable and that that buyer is quite sure about his purchase. The seller will understand that you can truly afford the property and that you are quite serious about making the purchase.
- Greater flexibility for taking action: With your finances already evaluated during pre-approval, you can take immediate action when you find the home you want to purchase. By getting pre-approved, you already have the ball rolling.
- An advantage over other buyers: If you are up against other prospective home buyers who have not been pre-qualified for a loan, then your pre-approval may just what you need to gain the upper hand.
FAQ’s about Pre-Approval
The pre-approval amount is the maximum you may get. It does not guarantee that you'll get a mortgage loan for that amount. The approved mortgage amount will depend on the value of your home and the amount of your down payment. It may be a good idea to also look at properties in a lower price range so that you don’t stretch your budget to its limit.
With a pre-approval, you can:
- Know the maximum amount of a mortgage you could qualify for.
- Estimate your mortgage payments.
- Lock in an interest rate for 60 to 120 days, depending on the lender.
There are several benefits to getting a Pre-Approval before you start searching for your next home.
- Your mortgage will be secured for 120 days. Even if rates go up, yours won’t.
- You’ll know what you can afford, helping to narrow down the search process.
- Pre-approval will make you look like a more serious buyer, helping you find a good realtor and can give you negotiating power with the home seller.
- A mortgage pre-approval will make the final closing faster since you already have most of the work completed.