What is a Mortgage Pre-approval?
If buying a home is on your mind, then maybe you have wondered what steps are involved in the process. One of those steps is pre-approval. Being pre-approved for a mortgage means that your lender, such as Shamrock Financial, has made a conditional commitment to lend you a certain amount of money at a specific interest rate so that you can buy a home. It’s the first serious step in the home buying process.
What exactly happens during the pre-approval process? Keep reading to find out.
What Happens in the Pre-approval Process?
You need to know what to expect during a pre-approval. First, you and your Shamrock Financial loan officer will meet to chat about your financial goals, the amount you can afford for a home, your down payment, and other points relating to your home purchase. Your loan officer will tell you about the types of mortgages available, such as fixed rate, variable, and their payment options.
On your end, you will need to complete a mortgage preapproval application. You also need to provide various financial documents, such as your pay stubs, bank account details, as well as permission to look at your credit report. Once you are pre-approved, start looking for the perfect house.
It’s important to know that you are not obligated to buy a home once you are pre-approved. Also, while it does let you know how much you could be allowed to borrow, nothing is final until you complete a formal mortgage application and are approved.
What's the Deal with Pre-qualification Versus Pre-approval?
Think of pre-qualifying for a mortgage as a preliminary step in the house buying process. It simply gives you a ballpark figure about how much you may be allowed to borrow based on some general details, such as your income, assets, and debts. It is quick, it is easy – but it is not a loan commitment.
On the other hand, a pre-approval is a little more serious. Your need to fill out an application, then you and your Shamrock loan officer will take a deeper look at your finances, and discuss your goals and various mortgage products. Once you are approved, you will get a pre-approval letter to have for when you decide to make an offer on a home.
The Need for Mortgage Pre-approval
Getting pre-approved is a crucial part of home buying. Why?
- Sellers will take your offer more seriously when they know, based on your per-approval document, that a mortgage lender is willing to give you a mortgage.
- Being pre-approved can give you more power in case you have to negotiate.
- It saves you and your real estate agent time by focusing on the homes within your price range.
- It gives you a better idea in advance of how you can budget for your future home and associated bills.
- You get to lock in your rate for a set time, regardless if rates go up.
- Getting pre-approved is free!
How Pre-approvals Help Real Estate Agents
Getting pre-approved also helps real estate agents for both the buyer and seller. First, the buyer’s agent knows exactly the price range of homes to show. The seller and their agent will entertain only offers from those who have pre-approval letters, weeding out those who could not get a loan for the necessary amount. In fact some sellers require a mortgage preapproval letter from potential buyers. On both sides, it saves time, effort, and frustration.
Why Use a Shamrock Loan Officer for Your Pre-approval
When you want to get the best pre-approval terms for home buying, Shamrock Financial is the place to go. They will examine your finances and suggest ways you can improve to get better terms or create a better budget. Next, they will research all available mortgage products and answer each and every question you have. Communication is of utmost importance.
What’s more, Shamrock’s loan officers have extensive knowledge about federal, state, and local financial products that make affording your home even easier. Finally, they pride themselves on guiding you through the pre-approval and mortgage process from start to finish.
The Benefits of Working with Shamrock Financial
When the time is right to buy a home, come in to see Shamrock Financial. Our 27 years of experience in the mortgage business means we know all about pre-approvals, ranging from the simplest situations to more complex cases. We can do it all. Get pre-approved with Shamrock and start your house hunting today.