So, after years of dreaming, it’s about to become a reality – you’re finally ready to buy a home! If you are already starting with the process, you might have been told by your agent or perhaps your friends and family to get your mortgage preapproved.
You might be wondering if there’s a reason this is being suggested by everyone you talk to. Is it even necessary to get preapproved for a housing loan? And what is a mortgage pre-approval? In this article, Pennix Mortgage will answer that question and why it’s important for homebuyers to get preapproved:
What Is a Mortgage Pre-Approval?
Simply put, it is a statement from a legitimate lender that states you, as a buyer, are qualified to get a loan for up to a specific amount. It will also include pre-approved interest rates, although it is worth noting that this can still change, depending on how fast you can put in an offer on the property you are eyeing. However, always remember that mortgage rates change all the time.
To come up with the loan amount they promise to loan you, they will also consider the same factors they’ll take into account when you apply for actual mortgage approval. That includes your debt-to-income ratio and your credit score, among others. Needless to say, the more stable your financial situation appears, the higher the amount you’ll be pre-approved for.
Why Is Getting Mortgage Preapproval Important for Home Buyers?
It Allows You to See How Much Your Actual Budget Is
One of the most important points that you consider when buying a home is the cost of the house. Until you get preapproved, you won’t know what budget you’ll be working with, so it’s going to be harder to narrow down your choices. When you are pre-approved, you’ll have an idea as to which houses you can seriously consider and maybe even make an offer for.
It Makes You More Attractive to Sellers
If it so happens that you are buying in a seller’s market, the competition can be tough as there may be many people looking to buy the same house you’re looking at. By getting your mortgage pre-approved, you’ll become more attractive to sellers because they’ll see that you are indeed serious about the offer. Other than that, it shows that you’re prepared to close the deal because a lender has already agreed to loan you the amount you need for the house.
It Gives you a Better Chance at Negotiation
Because you are already pre-approved, sellers will be more likely to compromise on some terms because they know that the sale is already certain when you reach an agreement. For instance, you will have a better chance of convincing the seller to throw in some of the repairs that you think the house needs or to include some appliances in the sale. In a way, a pre-approval gets you in a better position in your negotiations.
It Allows You to Close Faster
Did you know that it takes roughly 50 days to close a home sale? This is because a mortgage can take a while to be approved. However, if you are already pre-approved, that wait time could be cut in half. Because your finances are already secured, you can proceed with other things like a home inspection. Sellers know also this, so they’re likely to choose a buyer who is already preapproved, especially if they’re in a rush to close.
Conclusion
As you can see, there are only advantages and no drawbacks to getting your mortgage preapproved. Once you get that out of the way, you’ll be surprised by how faster the process of home-buying goes. The best mortgage lenders in your area will tell you the same thing as well, as you’ll be able to purchase your dream home faster than usual!
If you want the best home finance programs from a reputable lender in Cumming, GA, Pennix Mortgage has your back. We offer an array of loan programs that you can choose from. Our experts can guide you and even help you get preapproved fast! Get in touch with our team today, and we’ll help you get one step closer to getting your dream home!
