Should I be Pre-Approved for Mortgage?
Before you start looking at houses as you start your home ownership journey, many will advise you to visit a lender’s office. But why? You wonder.
Mortgage pre-approval is a process where a potential lender goes through your documents, credit score, financial status and gives you a letter which indicates the amount of mortgage that you can qualify.
To learn more about this process, you can read through our article on Everything you need to know about pre-approved mortgages. In this article, we will cover the reasons why getting pre-approval before house hunting is essential.
- To get a competitive edge
When house hunting, remember, you may not be the only one looking for a home. The real estate market is very competitive. You may hear people describe it as a buyer’s or seller’s market. When it’s referred to as a seller’s market, it implies that listed properties are scares and prices are high.
If you find a particular property that meets your desires, having a pre-approval from a potential lender will give you the upper hand.
- Your offer may not be accepted
Once you place your offer on a real estate; your desire is to have the seller consider it. However, if you submit the offer without a pre-approval, many sellers just reject it. You need to put the right foot forward when you make an offer.
Sellers usually consider offers that come with a real pre-approval. That is one that the lender has verified your bank statements, credit score, tax returns, etc.
- Know your status
Going through the pre-approval process is like paying a visit to the doctor for regular checkups. You need to understand where you stand so that you can comfortably go about the house hunting process.
Don’t let the fear of knowing your status keep you from getting pre-approved. Some people just don’t want to share their private information with a lender. But you need to know your situation to know the price range of houses that you can comfortably purchase.
If the 45 to 60 timeframe of the pre-approval elapses, you should consider getting a second pre-approval, especially if you need more time to find a home. Consult our mortgage broker to help you with the pre-approval process.