Have you been thinking about buying a home? Have you thought to yourself, “Can I afford this home? How can I find out”? Whether you’re looking to buy your first home, or you are an experienced home buyer, a mortgage pre-approval can be very beneficial to you in helping get you into that house you want!
What is a Pre-Approved Mortgage? In order to receive a pre-approved mortgage you must speak with a lender. Based on your credit, income and assets, the lender will determine how much they are willing to loan you. Once the determination has been made, you will receive a pre-approval letter from the lender stating how much you can borrow. These approval letters are usually valid for 90-120 days, but may vary as every lender is different. Keep in mind that every lender has different policies to follow when it comes to pre-approval.
There is more than one way you can go about getting your mortgage pre-approved. Whether it’s through a mortgage company such as Concierge Mortgage Group, or an insurance company, trust company, loan company, credit union or a bank, having a pre-approval before looking at homes saves time and disappointment. Having a mortgage pre-approval makes for an easier home search process by allowing you search for homes in the price range best suited for you and avoid wasting valuable time looking at properties that you can’t afford. There is nothing worse than finding the home of your dreams and not being able to afford it.
Having a pre-approved mortgage is also beneficial because as a buyer you become more appealing to home sellers. The sellers can see that you have done your due diligence as a buyer to become qualified and are motivated to buy their home. This is especially true when you are competing with multiple offers. By having the pre-approval in hand, your chances of having your offer accepted over another’s are higher especially if the seller wants a shorter closing date. The reason is it can take 1 or 2 weeks before you know if you get approved or not by your lender.
Having your pre-approval will also help knowing the costs. Knowing your approved amount will allow you to know exactly how much you have to work with after all of the extra costs such as; closing costs, lawyer’s fees and inspections, insurance, moving costs or renovations after move in. This will also help you know how much you will be spending on additional costs over and above the purchase price so you are not surprised and overwhelmed.
Even though you have been pre-approved for a mortgage, there is still a chance that you may be denied. This can happen for various reasons such as; falling behind on your payments, closing credit cards, taking out loans or changing jobs. During the time between the pre-approval and closing the deal, it is extremely important keep everything in order.
Getting a mortgage pre-approval has its benefits. It allows you to look at homes within Orangeville, Shelburne, Grand Valley or anywhere that you can afford without being disappointed as well as makes you appealing to sellers showing that you are a motivated buyer. Keep in mind if you are looking to buy, that in this competitive market, getting pre-approved is a great start to helping get you into the perfect place for you to call home.