What is the benefit of having a Mortgage Pre-Approval when looking for a new home?
There is a difference between a Mortgage Pre-Qualification and Mortgage Pre-Approval.
A Pre-Qualification is based on the information you verbally give to qualify for a mortgage. It’s an informal snapshot of your creditworthiness just to get an idea of how much you can afford to spend on a home.
A Pre-Approval is a formal commitment by your lender that they will lend you a specified amount of money when you find the right home. To become Pre-Approved you will be asked to submit documentation of your creditworthiness. An underwriter will review and verify these documents to confirm in writing how much you can afford to borrow.
If you are looking to buy a house, a Mortgage Pre-Approval is the smartest way to get you into your dream home.
Knowledge is Key: A Mortgage Pre-Approval gives you a good idea of how much house you can afford. This amount is based on a formula that compares your income to your total outstanding debts plus the proposed new monthly housing expense ( mortgage payment, taxes insurance and PMI) This will keep you focused on the big picture and help to prevent being disappointed if you fall in love with a house that is too expensive.
Improve Your Negotiating Position: When a seller is comparing two offers and one of the buyers has Mortgage Pre-Approval, there is a high confidence level that that deal will go through and close sooner. This may help you to win in a competitive bidding situation.
Confidence in Your Offer: Know that the key information in obtaining a mortgage has been reviewed by an underwriter will give you, and the seller, confidence that your offer is bona fide.
Keep Your Spending on Track: Having detailed information on your interest rate, closing costs, term and down payment will help you stay within in your monthly budget.
Time is Valuable: Knowing what you can and cannot afford will save time and frustration in the house hunting process. This will also help your find the perfect house in your price range.
Move in Quicker: With Mortgage Pre-Approval, once you have found the right house, all you have to do is get it appraised for final approval. The faster you close, the quicker you can move into your dream home.
Reach out to Me at 860.945.9284 to discuss the right mortgage option for your family and to take advantage of my FREE Jump Start Mortgage Pre-Approval service and be ready to make an offer on your dream home