The Importance of Pre-Approval in the Home Buying Process

Photo Cerdit: Unsplash

Embarking on the exciting journey of buying a home? Before you dive headfirst into searching for houses, there is one step that can make the whole process smoother: getting pre-approved for a mortgage. 

What is Pre-Approval?

Pre-approval is a process where a lender evaluates your financial situation and determines the maximum amount they are willing to lend you for a mortgage. Lenders do an in-depth analysis and consider credit score, assets, financial history, and other details in your finances. This is different from pre-qualification, which is a less detailed preliminary assessment of your finances. 

How long does it take to get Pre-Approved?

Mortgage pre-approval takes different amounts of time depending on the lender you go through. Typically, you can expect it to take around 10 business days after you send in all of the information needed. For more specific information on timeline and financial information needed, ask your lender. 

Benefits of getting pre-approved:

• Setting a realistic budget: By finding out the maximum amount of money you will be able to spend on your future home, you are able to narrow down your search into houses that fit your budget. This gives you peace of mind as you look at homes, knowing you will be able to afford them!

• Getting a Competitive Edge: In the real estate world, having a pre-approval gives you a distinct advantage over other buyers. When a seller receives an offer from a buyer with a pre approval, it shows that the buyer has the funds to back the offer and is serious about buying. This can make your offer much more appealing and increase the chances of your offer being accepted. 

• Expediting the Closing Process: Pre-approval expedites the closing process because the loan process has already begun and the initial financial assessments are completed. This makes the time between your offer being accepted and closing on the house faster, allowing you to get into your new home sooner!