Successful house hunting starts with mortgage pre-approval – Not talking to a Real Estate Agent.
What Is Mortgage Pre-Approval
Minneapolis, MN: Mortgage pre-approval is what happens when you talk to a Loan Officer and find out how much house you can afford. It’s an important step because it helps your real estate agent zero in like a laser beam on the correct house price for you. Your mortgage consultant will ask questions about your financial situation, including job, income, assets, debts, and more. Then you’ll talk to them about your comfort level when it comes to a monthly mortgage payment. It’s important to know this, in order to avoid buying a home you really can’t afford.
At this point, you are NOT pre-approved. The next step to full pre-approval is submitting all your documents to the lender. Common items include; photo ID, pay stubs, W2’s, and bank statements. Once the mortgage company reviews these documents, THEN you will be pre-approved!
Here’s a look at some of the benefits to getting pre-approved before you house hunt:
- Powerful Buyer. Sellers often give preferential treatment to pre-approved buyers since they know for sure that you can finance the purchase. If you get into a bidding war with another buyer, the seller might look at your offer in a better light than someone who hasn’t talked to a mortgage consultant.
- Interest Rates. As interest rates go up and down, you can get in on a locked rate before they go up again. You can lock in an interest rate if you are pre-approved, as soon as you have a signed purchase contract. A lower interest rate will save a lot of money over the life of that mortgage.
- Credit Surprises. Mortgage pre-approval reduces credit surprises. If you wait until the last minute to secure financing and find that you have a few issues that need to be resolved with your credit, you could miss an opportunity to purchase your dream home. Getting pre-approved will help you head-off surprises so you can go look for the perfect home.
Mortgage pre-approval is as close as anyone can get to insuring you’ll be able to obtain a mortgage loan in advance of finding a home. Pre-approval gives MN and WI first time home buyers a definite idea of what they can afford and shows sellers that they are dealing with a serious buyer.