It’s not a 100% guarantee that you will get a mortgage for that amount, but it means that it’s very likely you will be approved for the loan once you find a home you’d like to buy and make a formal mortgage application.
Mortgage pre-approval is a very powerful tool, particularly for first-time home buyers. In this process, you’ll go to a bank or lender with all of your financial information, and they will “pre-approve” you for a loan for a certain amount of money.
While this does not 100% guarantee that you will get a mortgage for that amount, it means that it’s very likely you will be approved for the loan once you find a home you’d like to buy and make a formal mortgage application. Let’s consider the top 5 benefits of a mortgage pre-approval.
1. You Can Shop Around Before You Start Looking For Homes
You can get pre-approved for a mortgage before you even start looking for a house. This means you can take your time, shop around with different lenders, and see what terms and rates are being offered.
You can take more time to make your decision and find a better deal than scrambling to find a lender after you make an offer on a house – and this can save you some serious cash in the long run.
2. You’ll Have a Set Budget to Work Within
Once you’re pre-approved, you’ll know exactly how much you can pay for a home. This helps you narrow down your search and avoid the heartbreak of falling in love with a home that’s outside of your price range.
3. It’s Easier to Negotiate With a Home Seller
Home sellers like to see pre-approved buyers because that means they have been vetted by a bank and are very likely to be approved for a mortgage. This can give you more negotiating leverage and ensure a smoother offer and counteroffer process.
4. You’ll Outcompete People Without Pre-Approval
Compared to a person without pre-approval, most home buyers will choose a pre-approved buyer, which can make your offer look more attractive – particularly in a very competitive real estate market.
5. Closing Will Be Faster & Easier
If you’re pre-approved for a loan from a particular lender, you can easily go back to that lender to get your mortgage when it’s time to buy. They may re-examine your finances a bit before your loan is issued – but since most of the work will be done during the pre-approval process, the process will be a lot faster and easier compared to applying for a mortgage from scratch. This leads to a faster overall closing!
Need To Get Pre-Approved?
Whether you’ve got questions about mortgage pre-approval or you’re ready to buy a house and want to be pre-approved, Better Rate Mortgage is here to help. Contact our team online or give us a call at (314) 361-9979 to get started right away and get all the information you need.