The Advantages of applying for a Pre-Approval
Pre-approvals are certainly beneficial. However, they can also be very disappointing if you are not prepared to know what they actually mean.
- They DON’T mean… that you have a mortgage. A pre-approval only indicates a possible price bracket you may be able to spend on real estate.
- They don’t mean that the rate in your pre-approval will be the rate you will pay. Again, this is only a guideline.
A good pre-approval
To get a pre-approval that is solid, it is important to know exactly what the terms of the pre-approval mortgage are.
Pre-approvals should show exactly what you qualify for in terms of how much money you will be able to borrow for a mortgage based on your financial profile.
- A good pre-approval will reflect that your income qualify.
- A good pre-approval will let you know how much money you will need to provide for a down payment along with closing costs.
- A good pre-approval will secure a rate for 90 to 120 days.
- A good pre-approval will be aware of lender guidelines concerning properties.
- A good pre-approval gives the Realtor sure negotiating power.
- A good pre-approval will prepare you for what you should expect your monthly mortgage spending budget to look like.
Thus, doing your homework even before you start looking for the property of your dreams, may prepare you for the expected as well as some the unexpected points in your home buying process. Good luck!
Author: Annemarie Swanepoel