Mortgage pre-approval is sometimes considered an unnecessary step in the long process leading up to a home purchase. But there are many more advantages to completing this step than you may have realized. Pre-approval means a lender has agreed in advance to give you a mortgage loan – under certain conditions. Here are six good reasons why you should ask for a pre-approved mortgage.
Once you complete the mortgage pre-approval step, you’ll be ready to move on to the next stage in your homebuying project. Your pre-approval certificate shows the maximum amount you can borrow based on the factors used to analyze a mortgage application. You’re therefore able to set a price range for potential properties, which helps you stay on track. If you know your borrowing power in advance, you can save time by zooming in on suitable property types and visiting only the homes in your price range.
When you know how much you can borrow and which properties to focus on, you have a better idea of the amount you can devote each month to your mortgage payments. You can also evaluate whether your downpayment is sufficient and you can plan your budget more easily.
With your pre-approved mortgage certificate in hand, you can be confident your homebuying project will be considered credible, not only at the financing application stage but also when you’re dealing with the realtor or seller. You’ll be taken seriously, making it easier to work with everyone involved.
The seller and anyone else working with the seller will see that your finances are in good shape and you’ll benefit from more negotiating power since they know you can quickly turn your attention to other properties. Plus, you can enjoy peace of mind when the negotiations get underway.
Your mortgage pre-approval usually comes with a guaranteed interest rate for a specified length of time. That way, you don’t have to worry about rising rates and you can take the time to find the ideal home for your needs.
It’s easy to get mortgage pre-approval, there’s no cost and you’re not obligated in any way. You also have the option of asking an advisor for assistance and guidance right from the start. During your homebuying process, the advisor can take the time to review your situation and help you decide which solution fits your projects and needs best.
You’ll be missing out if you don’t advantage of something so simple!