Congratulations! You’re finally ready to buy your own home. But before you head out house hunting, it’s important to know what price range you’re in. Only by getting pre-approved can you know exactly how much mortgage financing you can qualify for!
Most home buyers have a rough idea of how much they can afford to pay each month on their mortgage. But to translate that monthly payment into a maximum mortgage amount, it’s necessary to factor in things like:
- how big your down payment is
- variable interest rates
- mortgage insurance premiums
- property taxes, etc
You may not be qualified to borrow as much as you think. The only way to know for sure is by getting pre-approved.
Sellers often prefer to negotiate with pre-approved buyers because they know you’re financially capable of closing the transaction. This is especially important in a multiple offer situation.
Also, having a pre-approval letter can give you extra confidence in price negotiations. On top of that, real estate agents will generally give you extra time and effort when they know you’re a well-qualified buyer.
Pre-Approval Vs Pre-Qualification?
Before you begin, it’s important to know the difference between pre-approval and pre-qualification. To get a pre-qualification letter, you just call a mortgage broker or lender (or visit a website), provide some basic financial information, then wait a few minutes.
But for a pre-approval letter, lenders require documentation to confirm employment, source of down payment, and other financial details. Sure, a pre-approval takes longer, but the extra diligence is why it carries more weight.
Keep in mind that if interest rates rise, your financial situation changes, or the pre-approval expiry date passes, your lender will have to look at your situation again and issue a new pre-approval.
If you’re ready to get started today, we’d be happy to take you through the pre-approval process—so you’re ready to buy as soon as your dream home comes along.
*A pre-approval does not constitute a loan commitment or guarantee of a loan. Pre-approval is subject to a satisfactory appraisal, satisfactory title search, and no meaningful change to borrower’s financial condition.
Ideal Lending is your premier home mortgage lender in Florida. At Ideal Lending you will work one-on-one with a dedicated mortgage professional who can explain loan programs and offer great mortgage rates to meet your financial goals.