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A Crucial Step in Your Home-Buying Process is the Pre-Approval

Friday, October 28, 2022   /   by Laura Larson

A Crucial Step in Your Home-Buying Process is the Pre-Approval

Getting a pre-approval letter is one of the first things you should obtain if you want to purchase a property. Having a mortgage pre-approval is a great starting point, especially in the current market where mortgage rates are higher than just a few months ago.

What is a Pre-Approval?
To better understand why pre-approval is important, it is good to know what it is. The Mortgage Reports explains it like this: “When you’re ready to take the leap into homeownership, your first step is mortgage preapproval...A mortgage pre-approval is when a lender determines you’re qualified for a home loan. Your preapproval letter shows the maximum loan amount you’re approved for (your home buying budget), as well as the specific interest rate and loan term you can expect.”

A lender will examine your finances as part of the pre-approval process to decide how much money they are willing to lend you. Your lender will then provide you with a pre-approval letter that states your price range and the amount of credit you are eligible for. As a result, it will be simpler for you to begin your property search with a solid number at hand. A firm grasp of your numbers is more crucial than ever now that mortgage rates are rising and having an impact on affordability.

Pre-Approval Signals You’re a Serious Buyer
Another added benefit is that a pre-approval letter lets the seller know you’re qualified to buy their house. A recent article notes: “...getting pre-approved can actually improve your chances of falling into the sellers’ good graces, and you’ll want to get it done as early as you possibly can in the home-buying process.”

Preapproval is still a crucial component of making a solid offer, even though we don't see bidding battles this year as the market keeps changing. It might provide a seller additional assurance because it demonstrates your serious interest in their house and your qualifications as a buyer.

Bottom Line
It's important to get a mortgage pre-approval. It gives you a better idea of what you can finance and demonstrates to sellers your commitment to buying their house. Get in touch with Laura Larson and a reputable lender right now to get the resources you need to be a successful home buyer in the current market.