Written by: Michael Silverberg - Real Estate Agent - PSR Brokerage, Ltd.
What is a Mortgage Pre-Approval?
A mortgage pre-approval is a commitment from an institution (lender) that sets forth the parameters for which they'll lend you money, such as the rate. It is basically the lender saying, "we would lend you money for a mortgage based on what you have told us about your situation and criteria". The most important criteria these institutions look at are: earnings, credit rating, and down payment size.
Why It's Important for Your Realtor
If you are not pre-approved and trying to buy real estate in today's hectic market you are doing a disservice to yourself. Be prepared when making the largest purchase of your life. This is not a time to procrastinate. Your realtor will appreciate that you have taken the steps necessary to know that they can purchase a property.
Why Pre-Approval Is Essential
It narrows down the options for purchase because the borrower can evaluate the size of their down payment and the size of a mortgage that they are able to borrow.
If a buyer is not pre-approved, they risk purchasing a property and not getting approved for a mortgage if it is beyond their means. Pre-approved helps to know exactly what the banks, lenders or credit unions are willing to lend you. Give purchasers realistic expectations of what they can buy.
Realistic expectations make the purchasing process much smoother and less time consuming by streamlining the needs. This eliminates the need to visit homes that are unrealistic to the buyer.
Most importantly when it comes time to close on a property that's been purchased a pre-approval eliminates stress and lowers the amount of defaults from a lack of financing.
How to get Pre-Approved
Getting pre-approved is easier than ever with Homewise. Start your application today here.