The key to a successful house hunting mission is the mortgage pre-approval.
What Is Mortgage Pre-Approval
That's one our most frequently asked questions. Mortgage pre-approval is what happens when you talk to a mortgage adviser and find out how much house you can afford. It's an important step because it helps your real estate agent narrow down the focus of the house hunting. Your mortgage consultant will ask questions about your financial situation including credit history and income. Then you'll talk to them about your comfort level when it comes to a monthly mortgage payment. It's important to know this, in order to avoid payment shock!
Here's a look at some of the benefits to getting pre-approved before you house hunt:
- Powerful Buyer. Sellers often give preferential treatment to pre-approved buyers since they know for sure that you can finance the purchase. If you get into a bidding war with another buyer, the seller might look at your offer in a better light than someone who hasn't talked to a mortgage consultant.
- Interest Rates. As interest rates go up and down, you can get in on a locked rate before they go up again. You can lock in an interest rate if you are pre-approved, as soon as you have a signed purchase contract. A lower interest rate will save a lot of money over the life of that mortgage.
- Credit Surprises. Mortgage pre-approval reduces credit surprises. If you wait until the last minute to secure financing and find that you have a few issues that need to be resolved with your credit, you could miss an opportunity to purchase your dream home. Getting pre-approved will help you head-off surprises so you can go look for the perfect home.
Take a look at this interview that breaks it down from a mortgage consultant's point of view.
Trouble with the video? Visit the AmeriFirst Home Mortgage YouTube channel to see it.
Mortgage pre-approval is AmeriFirst's actual commitment to lend to you. Again, your mortgage consultant will gather some of your financial and credit records, and go through a preliminary approval process. Pre-approval gives first time home buyers a definite idea of what they can afford and shows sellers that they are dealing with a serious buyer.
(keys: Flickr user Bohman)