Mortgage Pre-Approvals: What You Need to Know
September 28, 2021
If you’ve made the exciting decision to become a homeowner, you’ve probably heard the term “pre-approval” somewhere along the way. A mortgage pre-approval is an important step to make your home buying journey as seamless as possible. But many people are unsure of what a mortgage loan pre-approval is, or they get this process confused with pre-qualification, which is not the same thing. Read on to learn more about pre-approvals and why they matter so much on your path to owning your own home.
Understanding Pre-approvals
As mentioned, pre-approvals differ from pre-qualifications. A pre-qualification is only an estimate of what a mortgage lender may be willing to loan you based on your financial information and a credit check. On the other hand, a pre-approval helps lenders confirm your creditworthiness even without an active purchase contract on a home.
The pre-approval process is simple.
- You complete a mortgage application.
- The lender verifies that the information is correct, including employment.
- The lender checks your credit.
If the mortgage lender decides that you’re pre-approved, you’ll receive an offer letter which is typically good for 90 days and indicates the loan amount you can get. The Mortgage Firm North Central Florida makes it simple by providing quick and easy pre-approval letters after confirming the information included in your documentation.
The Benefits of Being Pre-Approved
Once you have your pre-approval in place, you can begin to shop around for a home that fits your needs within a budget that you know you can realistically pay back. And, your pre-approval letter should remain valid unless your financial situation changes after your lender issues it.
Affects Buying Power
When you approach the home buying process armed with a pre-approval letter and mortgage amount, you have what’s known as buying power over someone who doesn’t. It’s a good indication to the home’s seller that you’re serious about buying and that you have a mortgage lender’s backing. This kind of leverage may also help you negotiate a better final price for the home.
Makes You More Attractive to Sellers
On the other hand, a prospective buyer without a pre-approval letter is a risk for home sellers. They could agree to sell but then realize that the interested party can’t actually afford the home. So as someone with a pre-approval letter in hand, you’re the more attractive candidate.
Saves Time
The last thing you want when you’re in such an exciting phase of life is to fall in love with a home that meets all your wants and needs, only to realize that you can’t be approved for that amount. Having a pre-approval letter from a mortgage lender keeps you from wasting your time or your realtor’s time. In fact, some realtors require one before they will work with you on shopping for a home.
The Mortgage Firm Helps You Get Pre-Approval Power
When you’re ready to buy a home in Ocala, Gainesville, or greater North Central Florida, following some simple steps at the beginning makes the process easier and less of a headache for you and your family. Since we opened our doors at The Mortgage Firm NCF, we’ve helped countless people like you get pre-approved for mortgage loans. We are passionate about making the home buying process as straightforward and enjoyable as we possibly can. Contact us today to learn more about how easy our pre-approval process is and how it sets you up for success in finding the home you have always dreamed about for yourself and your family.