Should you get a Mortgage Pre-Approval Letter?
The time has arrived. You’ve reached your goal, and managed to get to a place in life where owning a home is preferable to renting. You’re ready to take the plunge and start looking for the home of your dreams, so you fire up the computer and head right to the web and begin searching.
Stop right there. Did you get a mortgage pre-approval letter?
When you are finally ready to find a home, the last thing you want to do is get emotionally attached to one you “think” you can afford, only to find out you can’t. That’s why getting a mortgage pre-approval letter is an important component to successfully purchasing a home.
The Benefits of a Mortgage Pre-Approval Letter:
- Know your limits: A pre-approval will let you know — with relative accuracy — how much you can spend on a new home. This will make your search easier and much more enjoyable because you know your price range. Also think of it as a safeguard that makes sure that if you buy a home, you’ll remain financially stable.
- Let them know you’re serious: A pre-approval letter provides proof to both real estate agents and sellers that you are a credible buyer and able to react quickly if your offer is approved. In reality agents only want to close the deal, so seeing a pre-approval will make the process easy and smooth. Some sellers may go so far as to demand a pre-approval letter with an offer.
- Stress reduction: The bottom line is that if you aren’t pre-approved, you’ll most probably spend more time looking for a home. The key to being efficient in searching for a home is the pre-approval. You may not feel like you’re getting great service from your real estate agent, and you may get turned down once you’re ready to make an offer. All of this adds stress to what should be one of the most exciting times in your life. There will always be competition for homes, however pre-approval will expand options.
Speak to a trusted mortgage banker about securing a pre-approval letter before you begin the house hunting process. The benefits will go a long way to making your experience more enjoyable.
In closing, please take note of these important facts: A pre-approval letter does not guarantee you a loan. A lender may ask for additional income and asset verification as well as request that you satisfy other financial obligations or conditions before extending you a loan. All pre-approval letters are subject to modification or cancellation if your financial situation or other conditions change. Finally, having a pre-approval letter does not guarantee that an offer you make on a home will be accepted.
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