Benefits of Getting Pre-Approved for a Mortgage
Choosing a mortgage lender can be as stressful as finding a new home. It's no wonder that most Americans say that moving is more stressful than divorce!
Fortunately, it doesn't have to be that way. With a mortgage pre-approval letter, you can make your home-buying process as seamless as possible. Let's talk about some of the benefits of getting pre-approved!
What Is a Mortgage Pre-Approval?
You may have heard the terms "pre-qualify" or "pre-approval" before, but they are entirely different. Pre-qualifying simply means that you are likely qualified to receive a loan based on the information you provide the lender. Typically, this won't require any verification.
For example, you may self-report your income, credit score, and available funds to a potential lender. This may also include your marital status, military status, and other personal information. Based on this information, the lender may say you are pre-qualified for a loan up to a certain amount.
However, this won't mean anything until the information is verified. To move onto the pre-approval process, you will need to provide the lender with your:
- Personal information of all parties (names, addresses, SSN, etc.)
- The area where you want to buy a property
- A detailed credit report
- Income verification
- Tax returns from the previous two years
- Other financial information (outstanding debts, supplementary income, etc.)
Depending on the lender, they may request more information. If they deem you qualify, they may pre-approve you for a specified maximum dollar amount with a specified interest rate. Once you have this pre-approval, you can then take out a mortgage for this amount or less at a moment's notice through this lender!
1. Better Chances of Getting Your Dream Property
A mortgage pre-approval letter can help improve your offer when you find the right home. This could help you stand out from your competition, even if your budget is slightly less than theirs. A pre-approval letter demonstrates your legitimacy to sellers, and you'll likely receive a better response from them!
Also, having a mortgage pre-approval will tell you exactly how much you can offer, which means that you can start with a strong offer to limit your competition.
Moreover, this is especially important for first-time homebuyers, which are making up fewer home sales every year. Give yourself every chance to be taken seriously!
2. Finding the Best Deals
With current mortgage rates higher than they were, it's important to find the best deals on your mortgage. For this reason, you don't want to have to scramble at the last minute to find a mortgage loan. Instead, you should start as early as possible, even before you begin looking at homes.
3. Knowing How Much You Can Afford
Knowing your home price range can prove invaluable! Getting a mortgage pre-approval will tell you exactly what your budget is. This will make it easier to filter during your searches and help you find the right deal. At Conner Homes, we work with three trusted lenders, each with great programs and products to offer depending on your buying situation.
This way, you won't have any unpleasant surprises when you find the right home. The last thing you want is for a sale to fall through due to a lack of funding.
4. Avoid Delays
Buying a house is one of the most exciting times in life, especially for a first-time home buyer. However, there are factors that can delay a closing, which just keeps you away from your new home for longer. That’s why it’s important to use an experienced lender who
Having a pre-approval will prevent unnecessary delays if you have to shop around for a loan at the last minute once you find the right home for you. Again, this can give you the buying power you need at a moment's notice when you're ready to purchase.
5. Help With Negotiations
While we mentioned that it will help you pose a strong initial offer, a pre-approval will also help you negotiate a better deal. It's a lot easier to position yourself as a serious contender when you're able to show the available funds or ability to purchase. Unless you're a cash buyer, the only way to do that is with a pre-approval letter!
Motivated sellers will see that you won't delay the sale unnecessarily by lack of funding, which will make your offer as strong as possible.
6. Take Your Time
Shopping for a home doesn't have to mean racing against the clock to compete for every single listing in your desired area. Instead, you should take your time looking at the homes that you want to live in and tour them with a discerning eye. There are more homes on the market today, with some great pricing, so you don’t have to compromise as much as when the bidding wars were considered normal.
The home-buying process can take a lot of time, and it's not always easy for people with full-time jobs to take on all of the responsibilities themselves. Spend time online searching for what’s right for you. Contacting a trusted lender can make a world of difference!
7. Peace of Mind
Home searches are a lot less stressful when you know you can get one. If you spend your whole time looking at houses questioning if it's possible for you to buy, then you won't get very far.
However, when you know you have the funds available, you can confidently approach the listing agents with your pre-approval letter in hand and choose the house that you want! This peace of mind can eliminate so much of the stress associated with the home-buying process!
Get Your Mortgage Pre-Approval Today
Now that you know the key benefits of a mortgage pre-approval, why wait? Even if you're just starting to look, get ahead of the competition by finding the best deals and setting yourself up for a fast home purchase!
Stay up to date with our latest financial tips, and don't hesitate to contact us with any questions or for help finding a property that suits your needs!