Pre-approval – What You Need to Know

Are You Pre-approved?

There are many parts in the process of buying a home: saving for a down payment, searching for homes, and negotiating the offer. But there is a crucial part that you should not ignore, and that is getting pre-approved.

pre-approval

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What does being pre-approved actually mean? It means that a mortgage lender has made a temporary and conditional agreement that you can borrow a specific amount of money at a certain interest rate so that you can buy a property. It’s the first significant and formal step when buying a home.

It may sound a bit odd – getting a pre-approval for a mortgage before actually getting a mortgage. But while you don’t have to get pre-approved before starting your home search, it does serve multiple crucial purposes. For instance, getting a pre-approval for a mortgage helps in the following ways:

  • You get a clear idea of how much you probably will be allowed to borrow for a home. Narrow down your search for houses in this range.
  • You can lock into a specific interest rate for a set amount of time, which is great in case rates go up.
  • Your offer will be viewed with more significance over other offers given that a mortgage lender, such as Shamrock Financial, has given you a pre-approval document.
  • You will have more leverage during the negotiation process.
  • Best of all, it is free and takes very little time.

Pre-approval – Easy as 1-2-3

Do you know what happens during a pre-approval? First, you complete a simple and easy pre-approval application, answering some basic questions about your income, debt, savings, and so on.

You will also need to meet with a loan officer to chat about home buying. They will tell you about various mortgage products, including fixed rate and adjustable rate mortgages, as well as any programs you could be eligible for. You will also need to hand in documents such as your pay stub, or give the mortgage lender permission to check your credit report.

Once you have a pre-approval for a mortgage, start your house searching engines!

Note: Simply because you have been pre-approved does not mean that you have to buy a home. Nothing is final until you complete your official mortgage application, which happens after a seller has accepted your offer.

One last thing: like all good things, your pre-approval doesn’t last forever. It expires after a set amount of time, usually 60 or 90 days from the official approval date. If you want to buy a home after your pre-approval expires, then you will need to get another pre-approval.

Do I Need to Pre-qualify Too?

Nope. Pre-qualifying is an introductory step in the home buying process, and happens before a pre-approval. You don’t meet with a loan officer, or even have to enter a mortgage lending office. You simply log on to a mortgage lending web site, such as Shamrock Financial’s, and plug in some basic financial details, and out pops a price range that you can use to start budgeting for a home. However, it is not a loan commitment and you cannot use this when presenting an offer to a seller. But it is helpful to know how much you pre-qualify for.

Shamrock Financial is Your Pre-approval Home

When you decide now is the time to start that home buying process, Shamrock Financial is the place to go. We will make each and every appointment convenient for you, examine your finances, and explain about our various mortgage products. But that’s not all. We can also suggest ways you can improve your finances to get better rates and terms, and can guide you towards various loan programs to assist you in affording the home that you desire. With decades of experience under our belt, we know the ins and outs of mortgages. Come in and get a pre-approval for a mortgage, and buy the house of your dreams.

mortgage pre-qual vs pre-approval

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