San Clemente Realtors say, if you are ready to buy a house, then you are no doubt aware that you’ll need a mortgage to finance the purchase.
But are you aware that you should get pre-approved for a mortgage before you make an offer on a house?
Depends On The Market – San Clemente Realtors
San Clemente Realtors say, in today’s market it’s essential to get a pre-approval along with a offer is likely to be missed. Here’s what you will need to learn to make the procedure as painless as possible.
First of all, let’s start with the basics.
A pre-approval does not mean that you will ultimately qualify for the loan you want.
What it does mean is that a lender has reviewed your finances and has determined how much you can afford, the best type of loan for you, and what interest rate you can qualify for.
They will then provide you with a letter that you can submit if you make an offer.
Why You Need a Mortgage Pre-Approval?
San Clemente Realtors say, in a competitive market, many buyers may be making an offer on the same property as possible.
In order for the offer to be taken seriously, the seller might want to understand that you qualify for financing.
You’ll be at a significant disadvantage if you don’t take the time to get pre-approved, and your offer will be rejected.
Why To Get The Pre-Approval?
Ideally, you should obtain your pre-approval before you begin your home search in earnest.
When you’ve reviewed your credit reports and determined that you are financially ready for a home purchase, you can then find pre-approval.
Your pre-approval correspondence will be valid anywhere from 60-90 days.
If you want to be particularly cautious, you can ask for a pre-approval six months into a year in advance of your own future purchase to find out what you may qualify for.
Just be aware that you’ll have to do the procedure again when you are ready to make an offer as your own credit reports can change at that time.
Difference Between Pre-Approval and Pre-Qualification?
The difference lies in the review process is for the lender.
If you get pre-qualified, a lender makes a recommendation of what they can offer you based on the amounts you give them.
In this case, the lender is not questioning the financial information which you supply.
But when you get pre-approved, the lender is using the actual financial data to demonstrate just how much you can afford.
They will verify all the information you provide before providing you with the pre-approval letter.
How Much Time Does It Take?
The pre-approval procedure can take as few as one day.
However, if you have a complicated financial history, then the process could take anywhere from a few days to a few months.
Be upfront about your finances and provide all the documentation that the lender asks so as to make the process as speedy as possible.
Finally, some buyers may be concerned that the pre-approval process can hurt their credit score.
Be aware that although your score may fall a few points if multiple lenders are pulling your reports, it’s not enough to significantly damage your score.
