Mortgage Pre-Approval
MORTGAGE PRE-APPROVAL
A pre-approval is the first step and most important in the home buying process. This could be a tedious task most especially for busy people. But if you are a serious buyer and you don’t have the cash to purchase your dream house, then you have to have a pre-approval. And you need to do it fast!
There is a mistaken belief that applying for a should be done only after finding the house one is interested to buy. This belief is of course untrue and could prevent you from purchasing the house of your dreams.
As soon as you have decided that you are through paying monthly rents, fed up with your cramped living quarters, and decided to put down roots by buying a house, then it is a must to talk with a officer or loan specialist about a pre-approval.
The pre-approval is one that is applied before finding the house to be purchased. This kind of is offered by the local bank and by the many lenders around the world. An online lender may offer a pre-approval by getting your credit score and considering or assessing your financial standing.
A pre-approval will afford the buyer an edge over other buyers because he/she will have an idea what kind of he/she is going to take by taking into account his/her credit capacity as well as the terms of the prospective deal such as interest rates and monthly payments. Additionally, armed with a pre-approval, the buyer will have a “clear path” and will know exactly what his next action would be with the options that are provided. When he finds the ideal property, he will be able to close it fast.
The obvious benefit of the pre-approval on the part of the buyer is that with the approved amount of mortgage, the buyer will know his price limit, making shopping for a home easier. This would prevent the buyer from wasting his time. Why would a buyer bother to waste his time looking at houses priced
beyond $100,000 if his pre-approval only for $100,000?
Real estate agents stand to get benefits from pre-approval too. Real estate is a highly competitive business, and for an agent time is a precious commodity. A real estate agent spend considerable amount of time showing homes to prospective buyers. A deal that did not push through mean loss of time and money. A real estate agent who wants to maximize time would eliminate clients that are not considered serious buyers by asking for pre-approval.
Just like the real estate agent, the seller will also get benefits from a pre-approval. A pre-qualified offer will stand out among offers for the same house. From the sellers view, a pre-qualified offer is more important than an offer that is several hundreds higher but coming from a non-serious buyer.
Pre-approval should be done fast…within 24 to 48 hours, with no upfront and application costs. The buyer does not have an obligation to finish the process with the lender who has done the pre-approval.
A pre-approval would help the buyer obtain the faster because of the leverage he has over other buyers who are not pre-approved.
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