The Importance of being pre-approved
Tuesday, April 9th, 2013
Before you go shopping, it is important to know who much you can spend. One of the most important steps in the home-buying process is being pre-approved for a home loan. The pre-approval will determine your budget as well as secure your rate while house hunting.
For buyers who have been pre-approved, the mortgage associate has already done a credit check along with verification of income. The pre-approval is a commitment to loan the buyer up to a certain predetermined amount. It provides buyers with confidence when putting an offer on a home.
Based on your credit, down payment and income the mortgage associate can determine your pre-approved mortgage amount. It determines your price range and narrows the search parameters. This saves time for not only the buyer, but also your Realtor.
A pre-approval is also a rate hold. This secures your rate for 90-120 days while you are looking for a home. If rates increase, your rate is guaranteed. If rates decrease, you get the lower rate! So, in this regards, there is no negative effect to getting pre-approved.
To get started, the pre-approval process involves completing an application. This can be done in three ways: filling out paper form, verbally over the phone or meeting in person. You decide based on your comfort level and/or schedule. Contact me when you are ready to purchase your next home. And let me know if I can provide any additional information about pre-approval or financing options.
