Mortgage Pre-Approval Process

Talk with your bank or Mortgage Broker!

An important ingredient in a successful home search is knowing how much house you can afford. You don’t want to fall in love with a property only to find out it’s outside your price range.

Should I get a Mortgage Pre-Approval. This is a document from your bank or other lender stating how much of a mortgage they are willing to give you. There are two advantages to getting this pre-approval:

• It gives you the peace-of-mind of knowing you can afford homes you view on the market, and won’t have problems arranging financing.
• It’s a sign to sellers that you are a serious, prepared buyer – which gives you the edge when making an offer.

But putting your full faith in a mortgage pre-approval is like betting on a heavy favorite in a horse race. You’ll probably win but there’s room for major disappointment.

Sure, pre-approvals have benefits.

• The best ones accurately measure your qualifications and how much house you can afford.
• Their 90- to 120-day rate guarantees protect you if rates rocket up while you’re home hunting.
• They make you seem more serious to sellers and real estate agents. (In competitive bidding situations, they’re almost mandatory.)
• They’re free and there’s no obligation to use the lender that pre-approved you.

But here’s the problem: pre-approvals are not full approvals. So if you’re going to rely on one, you need to understand their limitations. See my blog post on Putting your full faith in a mortgage pre-approval?

You can arrange for a Mortgage Pre-Approval with your bank or other lender, or by working with a good mortgage broker. I’m well-connected in the local real estate scene, so if you want me to recommend a reputable broker or lender, please contact me.

The Mortgage Pre-Approval Process will help you find out how much house you can afford.

Banks and lenders use specific criteria to determine how much of a mortgage they’re willing to offer you. They look at your income, expenses, credit history and employment status, as well as the down payment you plan to make on a home. It may seem like a scary process, but it is actually straightforward.

By knowing what you can afford, you can confidently shop within that price range. For example, if you qualify for a $250,000 mortgage, and you have another $100,000 available as a down payment, you can look for homes in the $350,000 range.
Have questions about arranging financing? Please submit the form below or call or email me.