Mortgage pre-approval means a mortgage broker / lender has looked at your finances (income, expenses and credit) and has determined how much mortgage you can qualify for and what your interest rate will be. While mortgage pre-approval do not guarantee a mortgage, it does have some advantages.
- It tells you how much mortgage you can afford, to allow you and your realtor the price range of houses you should be looking at and save you from a heartache of falling in love with a house only to discover you cannot afford it to begin with.
- As part of the pre-approval process, mortgage broker has reviewed supporting documents except for the property information and have saved the information to help accelerate the whole process of approval when you have made the offer on your dream home.
- Having a mortgage approval in place shows home sellers that you are serious about buying a house, your finances are in check and that you won’t be denied a mortgage if they decides to sell their home to you. This gives you more negotiating power with a seller and an upper hand with other buyers who don’t have a pre-approval in place.
If you are pre-approved, a lender provides a pre-approval commitment (subject to property valuation) which list a loan amount and interest rate which is good for 90 days to 120 days depending on the lender.
Let’s talk if you would like to get pre-approved for a mortgage to start your home buying process.