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  • What Is a Mortgage Loan Pre-Approval & Why Do You Need One?

    Wednesday, January 2, 2019   /   by Trish Ford

    What Is a Mortgage Loan Pre-Approval & Why Do You Need One?

    What Is a Mortgage Loan Pre-Approval & Why Do You Need One.png

    Buying a home is one of the most exciting investments you will make in your adult life. With stars in your eyes and dreams of open floor plans, garden tubs, and a big backyard, it is so easy to get caught up in the thrill of the hunt for your first home. However, before you set out on your home-buying adventure, obtaining a mortgage loan pre-approval is the responsible place to start.

    What is a Mortgage Loan Pre-Approval?

    In general terms, a pre-approval is a guarantee from a lender that you are already approved for a mortgage loan up to a certain amount. The lender has already verified: 

    • Your proof of employment
    • Your credit score
    • Your payment capability
    • Your identity 
    • Your assets 

    Once you have this pre-approval, you will have a certain time frame for which you will qualify for the loan you are already approved to get. 

    What are the Advantages of Having a Mortgage Loan Pre-Approval?

    Having a pre-approval in-hand for a mortgage loan brings along a host of advantages for you as you shop for a home, including:

    • You will know what homes will involve what kind of payments
    • Sellers may be more willing to negotiate because you already have secured financing 
    • When you do make a decision on a home, you can get through the lending process faster

    With a pre-approval for a mortgage loan, you become a confident buyer. You know what you can spend, you know what homes are within budget, and you know where you stand. 

    What's the Difference between Pre-Qualification & Pre-Approval?

    Pre-approval is the top choice and what most prospective buyers choose to try and obtain before they shop for a home. Pre-qualification basically means that you have talked to a lender about your financial situation and they have made recommendations about what price ranges you should be looking at. A pre-qualification is not a guarantee of a loan; the actual approval will be done once your situation and credit have been more closely examined. Therefore, being "pre-qualified" is not going to be taken as seriously when you are negotiating with a seller. 

      home buying, financing, mortgage, pre-approval