Easily the two biggest questions that we receive on a daily basis in real estate is when should I get a pre-approval and what exactly is a pre-approval?
While both are excellent questions, let us see if we can clear the air on exactly what Pre-Approval is!
In the simplest terms pre-approval is the process of having a bank or lender investigate your credit history and current financial circumstances to determine if you are a suitable candidate for them to offer you a mortgage / loan.
To break that down a bit further a bank / lender is taking into consideration your current financial situation which will include things such as:
Your lender of choice will review all of the above considerations and explain to you their concerns or interests based on each of these points.
They can often give you advice in advance of a full application of a mortgage to try and make the process as easy as possible when you have found your dream home! But what is all of this for? Once a bank can determine your credit fitness they will be able to give you an idea of what they would be comfortable lending you.
Without question this should be the first step in your home buying process, as this will form the search of your home.
Upon completion of the pre-approval your lender will give you an idea of how much they would be comfortable loaning you and at what percent they would want to loan it to you at. This is important as it:
Have any further questions about Mortgages, the Pre-Approval Process, or how to get started today? Give our Mortgage Specialist a call today.