Why You Need to Get Pre-approved for a Mortgage

Are you ready to buy a home? Congratulations! Owning your own home comes with many benefits and is an amazing feeling.

For most of us, a home is the biggest purchase we will ever make. That makes the purchasing process, from start to finish, very important. 

You’ll put yourself ahead of the curve by getting pre-approved for a mortgage. Being pre-approved before you step into the housing market not only makes you a better-informed shopper, you’ll also be a more attractive buyer to potential sellers.

What pre-approval means

  • You have reached out to a mortgage lender ahead of making an offer on a home.
  • You have completed a mortgage loan application.
  • A loan underwriter has verified your financial documents and made a commitment to provide a loan up to a certain amount, subject to the basic contingencies the underwriter may define. 

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Pre-approval puts a stamp on the size mortgage you can get.

The world of home buying revolves around how much house you can afford. Managing your search for a neighborhood, the type and size of a home, and your “must have” list all depend on knowing what your dollar number is. 

Sometimes finding your number is really hard – online calculators and advice columns can only tell you so much! 

When you work with a professional such as a Capital Bank loan officer, he or she can assist you in the application.  Then, when the underwriter examines your tax returns, your income compared to the money you owe, your savings accounts, your credit score, and other documents give a full financial picture of how much house you can afford to buy. 

Additional information can help the lender determine the type and terms of home loans for which you qualify and the amount of down payment you may need. A pre-approval is the lender’s conditional commitment to giving you a certain home loan. 

The benefits of being a pre-approved buyer

  • You know the details of your financing before you pick out a house. You not only know how much house you can afford, you also know the terms of your loan. 
  • You know how much you can spend and won’t waste time looking at homes you can’t afford. You can act quickly to make an offer when you see a home that meets your needs and negotiate with confidence.
  • That could put you ahead of competing buyers who don’t yet have financing in place. 
  • You might get a faster loan closing than a buyer who is not pre-approved.

The benefits to others if you’re a pre-approved buyer

  • Real estate agents want to work with pre-approved buyers. Good agents can use their time – and yours – more efficiently when they know they are helping you shop for a home in the right price range.
  • Sellers are looking for pre-approved buyers. Many prefer to entertain offers only from pre-approved buyers. They don’t want to spend time and energy negotiating a transaction only to have that deal fall through at the last minute for lack of financing. 

Get pre-approved for your mortgage today

Pre-approval is a win for everyone involved in the home buying process: the seller, the realtor, and most of all, you, the home buyer. It speeds up the process, puts you in a superior bargaining position, and makes you a more informed buyer. Really, there are no downsides – and how often can you say that in life?

If you are in the market for a home and ready to get serious, get pre-approved for a home mortgage today.

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