Sometimes you might be in a situation where you need to borrow money to meet a specific individual financial need. It could be for an unexpected event, vacation, buying a car, funeral costs, home renovations, credit cards deficits, overdrafts, or even debt consolidation. Your lender will need to have proof that you can repay the […]
Before you start hunting for a home, it is essential that you get a pre-approval for your mortgage loan. It is a necessary step for everyone looking to buy a home despite their financial status. When you approach a lender for a loan, they check your credit history, and if they are satisfied, they will issue you with a letter confirming your possibility of getting a loan to cover your mortgage costs. It makes buying a house easier for you since it acts as proof of capability to buy the property from the seller. Here are the reasons why getting a loan pre-approval is essential.
Makes house hunting easy
When you get a loan pre-approval letter from your lender, you also get the amount of loan that you qualify for. As a result, you can look for homes that are within your affordability bracket and ignore those that are not. You also give your real estate agent an idea of your specific needs. It will also reduce the stress of having to look through all the homes in the market, and when you settle on one, you later find out that you cannot afford it.
When you have a budget at hand, you save time when looking for a house. You can concentrate on only those houses that you can afford and leave out the rest. You even get to put more time looking at the features of your preferred home. You also get to note things that you do not find appropriate, and you can have your real estate agent bring them forward during negotiations. Your real estate agent also uses your budget to find you a property that is the right fit for that particular budget.
With a mortgage pre-approval, you gain credibility from the seller. It proves that you are a serious buyer and improves the chances of your offer getting accepted. You also have confidence when negotiating for the property since you know that you can afford to pay for it. You can comfortably raise issues that you found regarding the properly for them to be addressed.
Shortens the closing period
You can quickly close the offer with a loan pre-approval since there is no window period. You can obtain appraisals even online, and you have them in less than a week. You can also have your down payment processed in less than three months, depending on your lender. It comes in handy, especially if the seller wants to close quickly or if you want to move in immediately.
You plan for your budget
Since a loan pre-approval comes with a specific loan amount, you can go ahead and make a plan on how to look for a house and even estimate a closing time. The time frames are essential for a real estate agent who will be handling all your transactions. You also get time to consult a financial advisor on your loan.
A loan pre-approval is a process that should not be ignored. It identifies a credible buyer, makes house hunting effortless and time-saving. It also gives you time to weigh your options and even get a consultation regarding your mortgage from a financial advisor.