What is Mortgage Pre-approval?
There are several widely used terms throughout the real estate and mortgage markets, but mortgage pre-approval is often the one which most potential home buyers are interested in learning about. When a prospective home buyer has decided that they are prepared to select a condo or single family residence, it is essential to know how the property is to be purchased. Learning about pre-approval can help in this process.
If a home buyer is paying strictly from savings, then pre-approval will not even be an issue; but if financing is involved, pre-approval can mean the difference between getting the home of your dreams or missing out on a valuable opportunity.
The term mortgage pre-approval simply means that you are pre-approved for a home loan. Being pre-approved is extremely valuable when a potential buyer is writing up an offer, and especially if they are competing against other aspiring homeowners for the same property. A mortgage pre-approval also makes the entire home buying process more streamlined, efficient, and easy to understand for the borrower.
The process of being approved for a mortgage loan takes into account income, credit score, current expenses, and proposed financial obligations of the potential borrower. This is beneficial to the borrower because it details exactly how much of a loan they qualify for, what their future mortgage payments would be, and the interest rates and terms associated with the chosen home loan.
Being pre-approved shows that a buyer is serious about wanting to own a home. A mortgage broker will typically provide the borrower with a pre-approval letter, which the borrower can then submit along with their purchase contract when making an offer. For many future property owners, obtaining mortgage pre-approval can be the first step in purchasing a residential property.
In some cases, real estate agents will not start showing properties to potential buyers until they have first been pre-approved by a reputable mortgage broker. As such, being pre-approved for a mortgage can open up access to properties a potential buyer would have otherwise been unable to consider.
The initial process is simple and can often be completed quickly. Usually a borrower will need to provide proof of current income, at least two months worth of bank statements, along with their social security card and drivers license. Then, an experienced mortgage broker will have the borrower complete a loan application and check the credit report. Many times, the pre-approval process can take less than fifteen minutes to complete.
About the Author:
First Alliance Home Mortgage is New Jersey's premier Mortgage Banker/Broker. Their experienced Loan Officers provide clients with the latest information on special government programs, equity acceleration, and how to choose the type of loan that best suits their needs. http://www.fahmloans.com
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