Why getting Pre-Approval for a mortgage is important?
If you are thinking about purchasing real estate in the near future your first step should be to talk to your lender or a mortgage consultant about your mortgage options. Buying real estate whether you are a first time home buyer, looking at revenue property or purchasing commercial real estate can be one of the biggest financial decisions you will make and most likely one that will be quite stressful. Having a pre-approval will certainly minimize some of the stressors.
“A preapproval is an approval for a mortgage based on a borrower’s qualifications made in advance of a real estate purchase. Mortgage preapproval is not a guarantee a lender will enter into a mortgage contract. Once you make an offer to buy a property, the preapproval is subject to you submitting supporting documentation and confirming your financial position. The preapproval is also subject to the property meeting the lender’s requirements. A lender might choose not to offer you the mortgage after more closely assessing you and/or the property”
Establishing a purchase price
Having a range to shop within can save you a lot of frustration. Why look at properties that you can not afford? Don’t waste your time looking at properties you are not qualified to purchase, keep in mind you are not only wasting your time, but the seller’s time and your realtor’s time.
Finding Credit Problems
How’s your credit history? Your credit history determines your ability to get a mortgage. Lenders ask to check your credit history when evaluating your mortgage application. Part of being approved is evaluating your stability of your income and employment – seasonal or contract workers may have more difficulty qualifying for a mortgage. Lenders want to see stable employment, there are mortgage products available for those who are self-employed or have less stable income. There are a lot of new rules and limitations that lenders have implemented and this may affect your ability to qualify for a mortgage.
Allow You to Move Quickly
Typically, sellers want you to full fill your financing requirements with in 7-10 days. A new mortgage application can take a week or more to work its way through a vendor’s system. Don’t loose out on your dream home due to time frames lapsing. A mortgage preapproval will strengthen your position at the bargaining table – a vendor may choose your offer in a multiple offer situation knowing that you have a pre-approval in place over a buyer who doesn’t.
Be a responsible borrower – know and understand how much a mortgage will cost and if you can afford it, and how it will affect your lifestyle!