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Reasons to Be Pre-Approved

Posted on March 17, 2023 by Hong Gayle

When you obtain a mortgage ahead of getting a property, your lender can "pre-approve" your financing predicated on your credit, income, and asset documents. It's important that you ensure that your credit history has been underwritten, not only "pre-qualified." With a pre-approval, your lender is stating they have reviewed your credit, verified your earnings and assets necessary for the financing, and the only real conditions which could become a concern pertain to the house.

Typically, your lender will issue a pre-approval up to maximum amount in line with the program and terms you be eligible for. Having a pre-approval at hand will help you in a number of ways:

  • Negotiation -You could have better negotiating power because of the "cash" factor. The seller's agent will advise owner your offer isn't more likely to tie up their house for weeks and then fall through because of loan declination.
  • Confidence - Being pre-approved enables you to know very well what your rate and terms are, which means you will know just what your down-payment and payment will undoubtedly be when negotiating for the new home.
  • Speed -Being pre-approved means a lot of your mortgage file has already been complete and contains been reviewed by an underwriter. In some instances this means you could be in a position to close rapidly after placing a house under contract. Sellers and agents appreciate this, and can sometimes make concessions due to it.
  • Waiting until after getting a property to use for a home loan loan could cause delays to summarize, raise doubts and fears about your capability to buy in the sellers and agents mind, and will cause an uncomfortable situation in case you are declined or struggling to qualify for the total amount you're seeking. Pre-approvals are essential to everyone involved. Owner, both agents, and you also, the customer all benefit. Speak to a lender prior to starting your house search.