One of the first questions an agent will ask when you show interest in buying is, “Have you been pre-approved?” But what is pre-approval, and as a buyer, is that something you should care about?
A pre-approval is a process a lender goes through with a buyer to determine what sort of mortgage that buyer can afford. The lender will look at several financial factors, such as credit score, credit history, income, debts, employment history and assets, and determine how much you can afford to pay back on your mortgage. Different lenders may have different interest rates or terms for their loans; therefore, it’s potentially worth your time to talk to multiple lenders, depending on what you’re looking for.
Getting pre-approved is hugely helpful in the process of buying real estate. Your pre-approval gives both you and your agent an idea of your budget and what sorts of properties you should be looking at. Without being pre-approved, you could waste time looking at homes that are too far above or below the mortgage you’ll be approved for. By getting pre-approved early in your house hunting, you’ll be able to focus in on exactly what sort of home you’ll be able to buy, saving you money and potentially even heartache!
If you’re thinking of buying, contact us today, pre-approved or not. We have several fantastic lenders we work with to refer you to. Our goal is to make the buying process as smooth as possible for you and help you through as many of the steps as necessary!