In the market that we are currently in, there is no time to waste. Getting a pre-approval should be your first step, no matter what, especially if you don’t want to miss out on the home you come to love. This blog is going to walk you through all of the things you need to know about a pre-approval, why you should get one, and how it will help you in the market today!
What Is A Pre-Approval?
A pre-approval is a letter that a qualified lender will write up, after they have gone through your financial background and determined how much you can afford. It will tell you the maximum amount of mortgage that you can qualify for, estimated monthly payments, and what your interest rate will be. Knowing how much you can afford will save you valuable time in the long run, helping you to avoid looking at homes that may be out of your price range.
How Do I Get A Pre-Approval?
In order to get a pre-approval you will need to speak with a qualified lender, who will collect all of the following needed information to determine your maximum loan amount:
- Your identification
- Letter of employment
- Proof of income
- Outstanding debt
- Bank statements
- Down payment
- Additional income and assets
- Position and length of time with your current employer
- Permission to allow the lender to obtain your credit report
It usually takes 24-48 hours for a lender to process your information and come up with your loan amount.
How Much Does A Pre-Approval Cost?
What most individuals don’t know, especially first-time home buyers, is that a pre-approval is completely free. You do not have to purchase or pay anything out of pocket for these services. This is why I highly recommend anyone who is considering the idea of buying a home to get a pre-approval because it will help set yourself up for success. This leads us to our next question.
What If I Don’t Pass My Pre-Approval?
It is okay if you do not pass your pre-approval. I think the greatest step is finding out the answer. Why? Because if you aren’t approved you will know what steps you need to take in order to get pre-approved and purchase the home that you have been hoping for. Your qualified lender should be able to offer you advice on what you can do to improve your chances of passing including; credit score improvements, saving more money, not changing jobs, etc.
What Are The Benefits Of Getting Pre-Approved?
Getting pre-approved shows a seller that you are financially prepared to have your offer accepted and have taken the steps needed to purchase your future home. In this market today, there is especially no time to wait on pre-approval letters, as the home that you love could be gone by the time your lender writes up your letter. Having a pre-approval speeds up closing time, and also narrows down your home search by a specific price range.
In Conclusion: Get A Pre-Approval Letter
Don’t forget this crucial step when going to buy your next home. If you have been wondering if you would qualify for a home loan, or what your maximum loan amount could be?
