Now that you are excited about deciding to invest in your own home, the first thing to do is find out how much you can borrow before you fall in love with a property that is out of your financial reach. Getting pre-approved gives you a clear picture about your own financial status and helps you manage your investment in a much better way.
Here are some solid reasons to get pre-approved:
- By applying for a pre-approved mortgage you will know the price range you should focus on when you start looking for your dream home and you will avoid disappointment.
- Your realtor will know exactly the kind of properties you are looking for, thus speeding up the process and saving you both time.
- In case the property you’ve decided on is in demand, being pre-approved gives you an edge over other buyers as it means a quicker sale for the seller. Sellers prefer to go with buyers whose mortgage is pre-qualified rather than those who have no idea how they will raise the funds for the purchase.
- Pre-approval helps you plan your money wisely since you can calculate your down payment and monthly payments. You know what to expect.
- Since your application has been reviewed, you are in a better position to negotiate the price, saving you a lot of stress in the process.
- The biggest benefit of pre-approval is the ability to lock-in your mortgage rate (usually for 120 days), protecting you from increases in interest rates.
- With this pre-approval, when you find your dream property, your deal is subject to the lender reviewing and approving the property. This process is much quicker than if the lender also needs to approve you, the borrower!
During the pre-approval process, besides deciding your down payment, your budget and mortgage amount, you will also explore different mortgage options such as interest rates, terms of interest and the payment options available to you. Based on the information you provide to your mortgage broker, an application will be prepared for your lender and your credit score will be checked. This is followed by your pre-approval and rate hold.
Now you can start house hunting with knowledge and confidence!!!
A pre-approval locks in your mortgage rate so that there are no surprises later and reassures you, making you aware of your financial commitment, helping you to plan better. Let’s get the ball rolling, contact me anytime!