Mortgage Advice

Why You Should Get Pre-Approved for a Mortgage Loan

April 12, 2013

With interest rates near historic lows and home prices only starting to rise, now is the perfect time to think about buying a home. But, before you start searching for your dream house, there’s one particularly important task you need to check off your to-do list—getting pre-approved for a mortgage loan.

The first step in buying a home begins with getting pre-approved. Obtaining a letter of pre-approval from a mortgage lender will ensure your home buying experience is smooth and successful from start to finish.

Before you embark on your pursuit to find the perfect house, consult with a mortgage lender first. By providing necessary documentation needed for a pre-approval, lenders will not only be able help you determine how much you’re eligible to borrow, they’ll also be able to help you determine how much you can reasonably afford.

When approached properly, a new home can be a very useful tool toward retirement planning and building wealth. For this reason, it’s important to work with a lender that understands your overall financial plan. By asking a few simple questions during the pre-approval process, lenders will be able to counsel you on the costs and tax advantages associated with homeownership and help you choose a mortgage that fits within the parameters of your financial plan.

By determining how much you’re eligible to borrow, and thus how much house you can reasonably afford, your real estate agent will be better equipped to help you find homes that match your criteria and fit within your budget.

Having a letter of pre-approval also shows real estate agents and sellers that you’re a serious buyer who is capable of closing a deal, putting you in a better position to negotiate on an offer. Should you find yourself caught in a bidding war with another buyer, having a letter of pre-approval will increase the chances your offer is accepted over theirs.

Getting pre-approved for a mortgage is a relatively quick and simple process. To start the pre-approval process, contact your preferred lender and provide them with the following documents: one month of pay stubs, asset statements, tax returns from the past two years, including W-2’s and your current mortgage statement (if applicable).

As you can see, getting pre-approved for a mortgage loan is the preferred route to take. Not only will real estate agents and sellers take you seriously, you’ll save time searching for homes and be better equipped to make a financially sound decision.

If you’re thinking about buying a home and have questions regarding the pre-approval process, please leave a comment below or contact me at 734.462.5990.

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