You have worked hard, paid your bills, and saved your money - so what’s next? You may already have your nice car and you have probably paid for it in full. Perhaps you are ready to start growing your family or just wish you had more space for the one you already have. Whatever the reasons for choosing to buy a new home, there is one step that you should take before any other. Obtaining a pre-approved home loan before you start shopping has several benefits, but most of all it will provide you, your lender, and realtors with a wealth of information that will make your home-buying experience faster and more enjoyable.
If you believe you are prepared to make a down payment, pay closing costs, and obtain the applicable insurance, applying for pre-approved home loans will make the process of obtaining a mortgage less stressful. First of all, simply applying for a pre-approval can alert you to any problems with your credit allowing you to rectify the situation before taking any further steps. Not only that, this process will confirm your ability to qualify for a mortgage and approves a specific loan amount. You can apply for and obtain pre-approvals from multiple lenders and this allows you to find the most appropriate lender for you situation. Each will determine their ability to offer you a mortgage deal based on your application, credit check, and verifiable financial and employment information.
After you have submitted your application and supplied the necessary documents your pre-approval will generally be in effect for a particular period, usually up to 90 days. By knowing how much house you can afford, your expected monthly payment, down payment and closing costs, you are more likely to look at homes in your price range and that will save you time. Meanwhile, real estate agents will take your home-search efforts and subsequent offer more seriously because they know what you can afford in addition to what you want. Consequently, they can do a better job of helping you find the property of your dreams within the 90-day limit. Meanwhile, a pre-approved home loan allows a lender to tell you the specific amount for which you are approved and in some cases you may be able to lock in the specific interest rate that has been calculated by the lender.
In any case, applying for a pre-approved home loan will grant you with many opportunities including faster, stress-free service. It can educate you about your home-buying prospects, prepare you for the fees involved, and lead to better service from real estate agents.