Pre-approval is one of the first steps in your homebuying journey. Before you go out and begin looking at homes, it’s important to get pre-approved by a lender. But what is being “pre-approved”? And why do you need it?
What Is a Pre-approval?
A pre-approval is a step in the mortgage process that occurs before you apply for a loan. In a pre-approval, the lender tells you which types of loans you may be eligible to take out, how much you may be approved to borrow, and what your rate could be. The lender will also disclose any conditions or restrictions on the loan.
Pre-approvals are valuable because they help ensure that when you do apply for your mortgage, you’ll get the best deal possible. You can use this time to look for potential homes and get your finances in order so that when it comes time to make an offer, everything will go smoothly and quickly.
Why do you need it?
The benefits of pre-approval are many, but one of the most important is that it can help you become a more confident and serious buyer. If you’re able to show sellers that you’ve been pre-approved by a reputable local lender, they will likely be more inclined to accept your offer which is good for both parties.
As we’ve seen during the pandemic, bidding wars have been few and far between. But that doesn’t mean pre-approval isn’t important! Buyers who can prove they have been pre-approved are likely to be viewed as more desirable than those who haven’t because it shows sellers you mean business.
Quick Recap
Getting pre-approved for a mortgage is like getting your foot in the door when you’re house shopping. It shows sellers that you’re serious about buying their home, and it helps you know how much house you can actually afford.
Now that you’re up to speed on pre-approval, here’s the bottom line: if you want to get into a home in today’s market, you need to be pre-approved.
If you’re ready to take that step and get on the path toward homeownership, contact us at TownSquare Real Estate so we can help connect you with one of our trusted lenders. Our partners can help you understand your options and make sure that when it comes time for closing, your loan is ready to go.
