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What is Home Loan Pre-Approval and Why Should You Get it

Wednesday, May 26, 2021   /   by Explore Homes In Florida

What is Home Loan Pre-Approval and Why Should You Get it

As you probably already know, buying a home requires numerous proceedings that must be carried out in order and in an extremely organized manner to avoid confusion or misplacing. One of the most important steps to take in this process is Pre-Approval. Being pre-approved will give you a heads up regarding your position with your financial entity and it will also give you an advantage when the time to place an offer comes.


 


Now, what exactly is loan pre-approval you might ask.


 


Being pre-approved means that your lender has already reviewed your profile and has agreed to lend you a certain amount of money for your purchase. This will then go to another reviewing period which will determine your final approval.


 


One of the greatest perks of being pre-approved is that you have a clear idea of how much house you can afford, so you will be able to perform a much more specific search according to your possibilities.


 


Even though it is not a requirement, we strongly recommend it. It will make the whole process much faster and lighter. If you’re up for it click here and get pre-approved in minutes.


 


First impressions matter.


 


When purchasing a home, you have to present a responsible and committed profile to the seller, they will want to feel confident about you and your ability to meet the requirements. Getting pre-approval will surely make you more attractive to them considering that your offer is most likely to be fully approved, given that you possess secure financing.


 


What could go wrong?


 


In general, there aren’t any downsides of having pre-approval; however, it is not recommended to apply for more than one at a time because it will make you look financially unstable, which can cost you the property you have on sight. Having said this, take things slowly and apply for pre-approval only when you are sure that homeownership is the next course on the table.


 


One of the most important things you must consider when pre-approved, is that it does not mean that a purchase is guaranteed. Yes, you will have a greater chance of having a home loan fully approved but, there are some factors that could jeopardize this proceeding, such as a change in your regular income, a change in the property’s condition, or government regulations.


 


Remember, if there are no major changes in those fields, you should be good to go.


 


Pre-qualification vs. Pre-approval.


It is often thought to be the same thing but here’s why they are different.


 


Pre-qualification is an estimated loan amount generated by a mortgage lender resulting from an overview of your finances, income, and debts. This is irrelevant when placing an offer.


 


Whereas, pre-approval involves a thorough check of your credit history, filling out a mortgage application, and providing you SSN, which will assess your creditworthiness. This is recorded on your credit report, and thus, it will impact your credit score. Pre-approval is much more valuable when placing an offer on a property.


 


Now that you have this insight, it is the perfect time to contact us for your pre-approval.


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