The Importance of Getting Pre-Approved for Your Mortgage
Buying a home can be a frustrating and confusing time in your life, even if you’ve done it a few times already. Lots of unfamiliar terms, potential uncertainty with interest rates, and the knowledge that this will be, most likely, one of the largest purchases you will ever make. It’s also an exciting time in your life, filled with hopes and dreams of what may be.
Be sure to set your expectations appropriately – all roads in life are likely to have a few bumps. One way to ensure this process goes more smoothly is to get pre-approved before you begin your house hunting adventure. Below are a few reasons you should get pre-approved before you find your dream home and make an offer.
Find Mistakes Now, Avoid Problems Later
When you apply to get pre-approved, your mortgage lender will run your credit report. This should turn up any errors or problems that could cause you difficulty in obtaining credit, and more importantly, it gives you the opportunity to make corrections before making any offers. You don’t want to lose a great property simply because your credit report has an error on it!
Know What You’re Looking For
A Pre-Approval Letter from your mortgage company tells you the maximum amount you will be able to borrow. That’s good news for two reasons. There’s no need to waste any time looking at houses you can’t afford. Also, you won’t unnecessarily settle for less home, simply because you’re unaware of what you can afford.
Get An Advantage Over Other Buyers
A pre-approval letter from a reputable mortgage lender demonstrates to sellers that you are a serious buyer. It eliminates any concern over your financing or that you will disappear. Your bids will be taken more seriously than other potential buyers, who are not pre-approved.
Lock In A Rate Now
Some mortgage lenders offer the additional opportunity of locking in an interest rate at the time of pre-approval. This may be worth your extra time and effort. Be sure to find out when any rate lock will expire and if there are any additional fees associated with locking now. While this may involve some additional paperwork or additional fees on your part, it may be to your advantage in the long run if interest rates will be rise in the near future.