When shopping for a new home, you want to give yourself an advantage and make yourself attractive to the seller. Just as important, sellers typically look for buyers who can afford their property. So how do you accomplish this? You obtain a mortgage pre-approval. A pre-approval lets the seller and their agent know that you are prepared and ready to take the next step in the buying process. It shows evidence that a lender has looked into your credit history, credit report, employment history, income and debt and has concluded that you qualify for a loan.  A pre-approval letter from the lender will give you an estimate on what you can afford. Being pre-approved, gives your offer credibility.

Mortgage pre-approval is important for a number of reasons:

1. Pre-approval determines the maximum mortgage loan and the program that best benefits your needs.
2. You won’t waste your time considering homes you can’t afford. Gives your realtor a collection of properties in your price range.
3. Puts you in a better negotiating position as there may be several offers on the same property.
4. The seller knows you are pre-approved for a loan and therefore gives your offer more value.
5. You will know the amount needed for a down payment and closing costs.
6. Lets you know if you qualify for special programs and/or rates.
7. It can lock your interest rate for up to 120 days. This protects against rate fluctuations.
8. Lets you know if you can afford a higher mortgage payment and reduces the time between the sale and closing.
9. Allows buyers and sellers to establish moving arrangements with confidence.
10. Peace of mind.

The Loan Prcoess