Should I get pre-approved for a mortgage before looking for a house?
When you are thinking of buying a home, it is important to get ahead of the game and get pre-approved. But what exactly does being pre-approved mean?
Pre-approval means the borrower has submitted basic financial information and provided access to their credit report to a loan officer. Then the loan officer looks at all of your finances. This includes your income, debt, assets, liabilities, and credit history. They then will determine how much money you can borrow, how much you could pay every month and what your interest rate will be.
In today’s housing market, you need to do all you can to stand out in a massive sea of borrowers. When you are able to submit a pre-approval letter from your lender with an offer it not only shows how serious you are in buying, but it means they have already verified your information and you’ve started the mortgage process.
Sellers are more apt to accept an offer if you have shown them that you have been pre-approved, it means there should be fewer issues with the mortgage. One of the last things a seller wants is the process being held up because there is an issue with the buyers employment, credit, or with their financial position.
Getting pre-approved can be a quick process. Sometimes it can take as few as 24 hours. Of course you will need to have all of your documents ready, like bank statements, employment check stubs, and tax returns.
Finally, keep in mind that just because you’re pre-approved to borrow up to a certain amount doesn’t mean that you should actually borrow all the way up to that amount. You need to do what is most financially comfortable for you.
If you have any questions about the home buying or selling process, reach out to any of our knowledgeable NextHome TriState Realty agents. 712-224-6398