Obtaining a Mortgage Pre-Approval

Spread the love

So, you’ve decided to buy a house, or maybe you have decided to buy that piece of property up the road and finally build your first home there? Whatever your reason for taking that step, what do you do next? Most would grab their laptop, tablet or phone and immediately start searching for that dream come true. This is a fun and exciting time and it’s real easy to jump into the search, and maybe even find that home of your dreams…. What happens if you don’t qualify? Let’s take a moment and discuss the benefits of obtaining a mortgage pre-approval from a lender or mortgage company.

NO DOUBTS

Who wants to go through the process of home shopping with that horrid feeling in the pit of their stomach reminding them that they aren’t exactly sure they will be able to get lending for the home they desire once it is found? I should hope that no one would want to experience this stress and unnecessary anxiety. When going through the pre-approval process,the lender will go over your loan application, financial information and personal information; the lender will then determine if you are able to obtain approval for a mortgage loan. If you are granted a mortgage pre-approval, it will provide you with how much money you will qualify to borrow and what amount of money you may be required to pay as a down payment for the mortgage loan. A pre-approval does not guarantee a mortgage loan, it is the responsibility of the borrower to maintain good credit and make responsible financial decisions during the shopping and buying process. All property and home purchases do not apply to all mortgage loans;check with your lender to be sure and have a clear understanding of exactly what your pre-qualification includes.

CREDIBILITY

Once the lender has granted you with a mortgage pre-approval, he or she should provide you with a letter, an e-mail, or some other valid form of certification to demonstrate your pre-approval status. This document is a useful tool when shopping for a piece of property or a new home because it can show property sellers, real-estate agents, and other professionals involved in the process that you are a legitimate buyer with the ability to close a transaction.

YOU’LL KNOW YOUR BUDGET

One of the most important factors in buying a home or piece of property is budget. What can you afford? What amount are you able to borrow in the purchase of the property? Obtaining a mortgage pre-approval will allow you to have a better idea or grasp on what your expected mortgage payment should and will be.

IS THE PRICE RIGHT?

What price range you should shop in? You don’t want to waste time and excitement looking at properties you may not be able to afford, for many reasons. Why add unnecessary stress to the process? It would be horrible to fall in love with a home, start going through the process to purchase, and learn that it is out of your price range and you cannot get approved for the mortgage. Don’t let this happen to you.

ELIMINATES PROBLEMATIC ISSUES

By obtaining a mortgage pre-approval prior to home shopping, you have given yourself time to identify and proactively address any problems with your mortgage application. This will enable you to handle these concerns prior to officially applying for a specific mortgage loan and will better ensure a smooth and much easier closing once your offer is accepted.

IT’S FREE!

Obtaining a pre-approval, if qualified, from a lender or mortgage company should always be a free service. I suggest talking to more than one lender so that you know your best mortgage options before deciding which lender or mortgage company to work with. Why not utilize the free service before you begin your search: It will only make the process less stressful for you. That does not mean you need to go through all of this and decide on a lender before you start shopping. Once you have a pre-approval, let the hunt begin. You can look at other lending options while you shop. Any good lender should be willing to do the work up front for your mortgage pre-approval; this gives them the opportunity to establish a relationship with you in hope of you deciding to finance your purchase through them or their business.

IT’S NOT A CONTRACT!

Just because you received a mortgage pre-approval from Mary Sue at So & So Lending Company in town because your sisters friend said to go there, does NOT obligate you to finance your purchase through So & So Lending Company. Again, shop around… See who has the best rates, and the best options and loan packages for you. You may qualify for a different amount or a better mortgage payment else where. Always know your options!

THE COMPETING EDGE

You’ve got your mortgage pre-approval and you’ve found the home of your dreams. Your agent submits the offer with your mortgage pre-approval for a little less than the price the seller is asking because it’s a smidge over budget otherwise, but you go for it. Now, you and yours are anxiously and patiently awaiting that call to find out if your offer has been accepted or not, and the phone rings. Your offer has been accepted. What you DO NOT know is that the Seller received two offers on their home that day; they received your offer as well as an offer for the full amount they were asking for, but they chose your offer. Why? The buyer that offered more money didn’t have a pre-approval and the sellers needed to sell quick. It was much less risky for them to accept your offer knowing it had a much better chance of closing than accepting the higher offer and find out 30 days later that that buyer could not get lending, leaving them no choice but to delay their move and start the process all over. What if you had been the buyer without the mortgage pre-approval?

POWER TO NEGOTIATE

Generally speaking, buyers who have obtained a mortgage pre-approval can have a better chance of negotiating the terms of the sale and pricing than buyers who have not obtained pre-approval. Sellers simply feel safer entering into a transaction with a buyer that has taken the steps to better guarantee a smoother closing. Wouldn’t you?

LOCK IN THOSE RATES!

In an ever-changing market one would agree that a 90-120 day rate hold could be a large benefit when your offer has been accepted and it’s time to begin the closing process. Specific rate holds are not guaranteed with all mortgage loans, these terms vary. However, a locked rate could protect you in the event that interest rates begin to rise before you’ve found that perfect property or home, and you aren’t quite ready to go to closing. Remember, a pre-approval is not a contract!! If you are able to obtain better rates or a better mortgage option, you can always change lenders and begin the loan process with them.

GET A MOVE ON!

Okay, you’ve found it!! Everyone is extremely excited, your offer has been accepted, the link for the listing has been sent to all friends and family to celebrate the upcoming move and you are so anxious to begin setting up your new home… Having a mortgage pre-approval gives you a fighting chance at moving quickly when you find that property you want to buy. The amount of time it will take to close your purchase can possibly be greatly reduced because the lender has had a jump start in the review process for your loan. The amount of time it takes to process the loan can possibly be a lot quicker if the pre-approval process has already been completed with the lender of choice. You will have already torn through the house if necessary, found all the pertinent financial documents needed to process the loan,and all those problematic issues discussed previously will have already been sorted out.
Be sure to check out my article: The Ultimate Moving Checklist.

Don’t let stress and anxiety overwhelm you when it comes to the pre-approval, mortgage, and home buying process. Contact us to guide you through the process. It can be a fun and exciting time with the appropriate knowledge and representation by your side. If you are looking to purchase or sell property or a home in Northeast Georgia please fill out the form below today or
CLICK HERE.

Let us help guide you through the process.

To speak with a licensed Realtor, please submit the form below. We look forward to speaking with you soon!

Join the Family!

More information coming soon, be sure to subscribe and follow for updates, and to get information about upcoming local events, local businesses, places to visit, and more. Visit negalifestyle.com to plan your next adventure today.