Pre-Approval and Why You Need It

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Why You Need To Get Pre Approved

Purchasing a home can be an exciting experience. It can also seem a bit overwhelming and confusing, especially if you have never done it before. The home buying process can be simplified if we take it step by step. And the first step to purchasing your home is to get pre-approved with your mortgage lender of choice. Here's why.

Getting pre-approved sets your budget 

When you start working with a mortgage lender, they will have access to your financial information. They will look at your credit, your debt, your income and your other assets and liabilities and they will be able to tell you how much you qualify for and will provide you with an estimate on how much you will to bring to closing. 

It is important to know your budget before you start looking for homes. There is nothing worse than falling in love with a home and then learning that it is out of your price range. Getting pre-approved provides you with your maximum allowed purchase price which may be higher than you assumed you could go.

Your mortgage lender will not only be able to tell you how much money you can borrow but he/she can also provide you with what types of loans you qualify for. There are different loan types available ( ex. Conventional, FHA, VA, USDA) and knowing which type of loan you qualify for and how much you will have to put down will affect how you shop for your home.

Getting pre-approved assures the seller

In today's real estate market, it is expected that home buyers include their pre-approval letter or some sort of proof of funds with their offer. This is especially important with the low housing inventory and multiple offers on each home. A seller most likely won't consider an offer if a pre-approval or proof of funds is not provided. A pre-approval letter from your mortgage lender goes a long way in proving that you are in a stable financial position with appropriate purchasing power.

Not sure who to call?

Contact Cindy Palmer for a list of local lenders that will be able to provide you with information on the types of financing best for you.