You may have been told in the past that getting a pre-approval is an important first step in the mortgage process. But why is that the case? The fact is that having a pre-approval allows you to do a number of things that you would not be able to do otherwise. A pre-approval is different from a pre-qualification. A pre-qualification is really just a best guess at how much of a home loan a lender is likely to give you. A pre-approval requires you to submit your financial information. The lender reviews this information and then lets you know how much of a loan you are approved for and what rate they are willing to offer. Typically, pre-approvals are valid for 180 days, but this may vary from lender to lender.
Here are a few things that you will be able to do once you have a pre-approval.
1.You will know how much house you can afford.
This will keep you from wasting time looking at homes that are out of your price range. It will also save you the heartbreak of finding the “perfect” home, only to learn that a lender will not provide the financing for it.
2. It will allow you to contract a real estate agent.
One of the best ways to find a home that suits you is to work with a real estate agent. But most real estate agents won’t work with anyone who doesn’t already have a mortgage pre-approval. This is because without an approval, they will have no idea what you will ultimately be able to afford. And since a real estate agent will only get paid if they help you find a home, they will not work with a buyer who doesn’t appear to be serious.
3. You will be able to put an offer on a home.
Just like real estate agents don’t wish to work with buyers who aren’t serious, neither to sellers. Many sellers will not accept offers from those without mortgage pre-approvals because they don’t want to risk the deal falling through because the buyer couldn’t get financing.
4. You can fill out the full mortgage application.
Once you have made an offer and that offer has been accepted, having a pre-approval will pave the way for you to fill out your full mortgage application and achieve your dream of becoming a homeowner.
Call AKAL Mortgages today!
If you are ready to get pre-approved for a mortgage, contact AKAL Mortgages today to speak with one of our brokers.
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