Mortgage pre-approval is an important first step to take when you’re preparing to purchase a home. Mortgage pre-approval is a substantialmilestone to reach when looking to get a mortgage, since it means that the lenders are checking your credit and verifying your financial situation. If you’re pre-approved, it means that the lender is making a commitment to lend you money to buy a home.
How do you get pre-approved?
First, you and your mortgage broker will discuss financial strategies, your down payment and the purchase price you’re looking at. From here your mortgage broker will help you look over various mortgage options and figure out which best suits your needs. You will then consent to an application that will include information like your employment history, income, assets, and liabilities and permission to obtain a credit report. Your mortgage broker will then counsel you on any documentation you may need to supply upon conditional approval of your mortgage. Remember that any conditions that exist must be met for your mortgage to be fully approved.
Not sure if the process seems worth it? Keep in mind that mortgage pre-approval will allow you to save time house hunting, since you will know exactly what you can afford. You will also have a better idea of your monthly payments and your pre-approved status may give you better negotiating power with a seller!