If you're ready to start looking for a new home, one of the first things you want to do is contact your
mortgage broker for a 'pre-approval'. Here are three great reasons to get pre-approved BEFORE
you start house-hunting:
1) Find out how much you can borrow.
-Realtors often want to see a pre-approval in place prior to helping clients search for a home.
-A pre-approval can save you and your realtor time by narrowing down the price-range you can
afford and decreasing the inventory of potential homes to view.
2) Guarantee an interest rate while you shop.
-A pre-approval will lock you into a rate for 90-120 days, and will bring you peace of mind
knowing you can afford the houses you are looking at.
3) Put yourself at an advantage over other buyers.
-In some cases, numerous buyers will be interested in the same property. A seller is more
likely to accept an offer from a pre-approved buyer because there is more of a guarantee that
your offer will be financed over the buyer who has not taken similar steps. Showing the initiative
to get a pre-approval from a lender will put you a step above the rest.
4) Speed up the conditions of financing process.
-A pre-approval can speed up the financing process because a lender has already begun
analyzing and researching your file.
Keep in mind that a pre-approval is not a complete guarantee that your loan will be funded.
It really is just a preliminary check and the mortgage underwriter will still need to do an in-depth
analysis of all your documentation once your submit a LIVE deal.
A Pre-Approval letter is more meaningful, and therefore more preferable. To issue this, a lender generally requires a buyer’s taxes, assets, income proof and credit. A Pre-Approval letter assures a seller that the buyer meets the guidelines to get the loan needed.
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