Home Loan Pre-Approval: Why It Matters and How to Get It
Updated: Sep 21
Image by Freepik
Hey there, future homeowners!
If you're in the market for a new home, there's one very important step you shouldn't skip: getting pre-approved for your home loan.
As your dedicated Edmonton mortgage broker, I'm here to guide you through the process and explain why it's so important.
So, without further ado, let's dive in!
What is Mortgage Pre-Approval?
This is a pre-check of the money you can borrow based on your financial circumstances and specific terms. This ensures you know what you can borrow before making an offer on a home.
Why Does It Matter?
Image by rawpixel.com on Freepik
Shows You're a Serious Buyer
When you walk into a home showing with a pre-approval for a home loan in hand, sellers see that you're not just there to look around–you're ready to make some moves.
It tells them that you've already been vetted by a licensed Mortgage Broker.
Know Your Budget
I know, this is not the most exciting topic, but when it comes to home buying, it's super important.
Mortgage initial confirmation helps you figure out exactly how much you can afford to spend on buying a house. This means no more guessing or worrying if it is in or out of your price range.
Also, you'll know exactly what your monthly payments could look like and how much you'll need to dish out at the closing table.
Speeds Up the Buying Process
Imagine you're running a race and you get to start halfway to the finish line–that's exactly what it feels like.
A significant chunk of the paperwork is already done and dusted. Your lender has already checked out your financial situation and given you the thumbs up. So, when you find your perfect dream home and make an offer, you're not starting from scratch.
Strengthens Your Offer
Picture this: you're at an auction, and while others are making those promises or writing IOUs, you're there with a certified cheque in hand. That's the advantage this backing gives you.
It's this tangible proof that you have financial support. Sellers don't just have to take your word for it; they can see you've got the goods!
It's like having a secret weapon that can give you an edge over some other buyers and make your offer stand out.
Getting Pre-Approved: The Process
Image by Freepik
Check Your Credit Score
Think of it like your financial report card. Lenders really do want to see that you have a history of paying back what you owe on time.
The better your score, the more likely you are to get approved. Plus, a top-notch score could even snag you that lower interest rate on your loan, which can save you a bunch of cash in the long run.
So, if it isn't quite up to snuff, it might be worth taking some time to improve it before you apply.
Gather Necessary Documents
I know paperwork is absolutely a drag, but it's crucial.
Lenders need to see your proof of income to make sure you can afford to pay back. You'll also need to provide your tax returns and details of any of your debts and assets.
Think of it like painting a picture of your financial situation. The clearer it is, the easier for them to say YES to your application.
Submit a Mortgage Application
Now it's time to take the plunge and submit an application. Sounds like a big, scary step, but don't worry, I'm here to guide you through it.
Wait for Pre-Approval
But what happens after you hit that 'submit' button? Well, it's time for a little patience. But only a little, within 24 hours you will be contacted by Nikole directly.
Remember, there are still some mortgage approval processes and steps to complete like property appraisal and inspection before the deal is sealed. But having a pre-approved home loan status is a huge step!
Nikole Rolof Mortgage Broker (780) 916-2492 firstname.lastname@example.org