Do I need a pre-approval?

Pre-Approval


Getting pre-approved for a mortgage is truly the first step that you should take if you’re serious about buying a home. First-time homebuyers, however, are often intimidated by the amount of work that it can take to get approved and end up shuffling this important step to the end of their to-do list. This can be a costly mistake.
First, let’s clarify a few things around pre-approvals. For one, a pre-approval is not the same as a pre-qualification. A pre-qualification, which is based on information borrowers supply to the lender as well as a soft credit pull, can be a great tool to help buyers see how much they might qualify to borrow.
Alternatively, a pre-approval is issued after the lender performs a thorough review of a borrower’s financial records or hard credit pull. For this reason, many sellers will request buyers have a pre-approval letter given the amount listed on the letter more accurately reflects the buyer’s purchasing power.
These days, houses can go off the market fast. To be competitive, buyers need to make sure they’re ready to submit an offer as soon they’ve found a home they love.
Having a pre-approval in hand is part of making a strong offer. The fact that you’ve taken the time to have a lender vet your finances show the seller that you’re a serious buyer. In competitive markets, sellers often won’t even consider an offer without mortgage pre-approval unless it’s all cash.
In a multiple offer situation, offers with pre-approvals attached will nearly always be given precedence over ones that just have a pre-qualification.
Keep in mind: getting a pre-approval doesn’t happen overnight. Since your lender needs to verify all your financial information, this process can take a day to even weeks to complete depending on your finances. That’s why it’s best to get it out of the way at the beginning so you’re truly ready when the time comes to make a move. 
Once you have a pre-approval in hand, you’ll be able to use that number to determine which properties are a good fit for you to see. After all, no one wants to fall in love with their dream home, only to realize that it’s entirely beyond their budget. It’s a good idea to view your pre-approval amount as your maximum.
Applying for a pre-approval can feel a little intimidating. It forces you to take an honest look at your finances, which is something a lot of us often dread. The good news is that no matter how messy your financial situation may be, getting a pre-approval could help you get it on track.
The paperwork required to get pre-approved for a mortgage gives lenders a thorough understanding of your financial standing. With this information, they can find the root cause of any issues and give you advice on how best to tackle them.
Even if you apply for a pre-approval, only to find out that you’re not quite ready to buy in your desired price range just yet, it’s better to learn that before you start shopping. With some time and additional savings, you should be in a much different position.
Okay, you get it. Now what?
Now, you’re ready to start applying! We are here to help. Over the years, we have vetted tons of lenders and have narrowed our preferred list down to the best of the best. But each lender has its strengths, and we will get to know you and make sure you’re paired with the best lender for you. Give us a call to get started. 

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