Even though many "pre-approval" letters you get in the mail are useless, there are some types of pre-approval from lenders that can help you a lot when buying a house. If your mortgage loan is already approved, it will be much easier to get the house you want quickly. Here are some facts about pre-approval for mortgage loans that can help you learn more.
Use first, then buy
People used to look at homes before applying for a mortgage loan, but now it's much more important to get the loan first. This will let you know exactly how much you can spend on a house, making it much easier and faster to find the one you want.
Pre-approval and pre-qualification
Even if you know you will get a mortgage because you have good credit and a good job, it is better to apply and get pre-approved than to just be pre-qualified. Pre-qualified just means that you can apply for a mortgage loan, but it doesn't tell you how much you will get. But if you get a pre-approval letter, you will know exactly how much you can borrow. This amount is a sure thing as long as nothing changes in your life.
Getting pre-approval
To get pre-approval, all you have to do is find the right lender for your needs and talk to them about it. They'll do the checks that need to be done and give you a pre-approval letter. Then you can start looking for your dream home.
Taking a look at the right houses
If you've already been pre-approved for a loan, you know exactly how much you can spend on a home. This lets you narrow your search to homes in the same price range. This will make it much easier for you to find a home that fits your needs and will save you time.
More power in talks
If your mortgage loan has already been approved, you will be seen as a cash buyer. Since you already have the money, the seller is more likely to take your offer right away, even if it is lower than the estimated price. This is because they can be more sure that their house is sold and take it off the market until the sale closes.
faster sale close
The closing of the sale is one of the parts of buying and selling a house that takes the most time. If you've agreed to buy a house but don't have a mortgage, it can take time to get the money together, or you might not be able to get the money you need. But if you have pre-approval, the money is already guaranteed, and the transaction can go much faster. This will make buying a house much less stressful and help you get the house you really want.
