Posted on: 15 February 2022
One of the very first things that you need to do when buying a home is get a mortgage pre-approval. This lets you know what a lender will potentially give you for a mortgage, and will ultimately determine the range of homes that you look at. Here are some tips for getting a mortgage pre-approval.
Clean Up Your Credit Report Early
The process of getting a mortgage starts before you even visit a lender to get a pre-approval. You'll want to take a look at your credit report and see if there are things about it that can be cleaned. This will help your finances look better when presenting yourself to a lender. For example, are there incorrect items on your credit report that need to be removed? Is your credit score too low and you need to take steps to improve it? These are all things that can catch you off guard when you get your pre-approval, and they can take time to resolve.
Get Your Pre-Approval Early
Don't make the mistake of delaying when you get your pre-approval. Many people start looking for homes first, and then look into the pre-approval process once they start getting serious. Unfortunately, you never know when a home you like is going to show up on the market. Waiting to get a pre-approval means that you could be scrambling to get one at the last moment, or end up submitting an offer without a pre-approval letter. Either situation can cause your chances of getting the winning bid to drastically go down.
Know The Difference Between A Pre-Approval And Pre-Qualification
You may see a lender offering you a pre-qualification rather than a pre-approval. Know that the pre-qualification is a very preliminary step in the mortgage process, and it often is done by verbally confirming a few key aspects of your finances and getting an approximation of how much a lender will give you. This is not the same as a pre-approval, because nobody has taken a serious look at your financial situation. Do not be surprised if your mortgage situation changes after going through the mortgage pre-approval process.
Know You Can Adjust The Pre-Approval Letter
Once you have that pre-approval letter in hand, know that you do not need to give that exact letter to a homeowner when submitting an offer. You can have the lender adjust the letter to reflect the price of the home you want to purchase, which will make it easier to negotiate a lower sale price. Contact your local home loan services provider for more information.Share