May 24, 2024


Mad about real estate

Mortgage Preapproval – Begin House Hunt Process With End in Mind

Are you ready to go house hunting? Getting help from a mortgage professional and asking them to get you a prequalification from a mortgage lender can make the house buying experience far more comfortable.

Your objective is to find out exactly how much house you are qualified for based on your income, your debt service levels and your overall credit worthiness. An independent mortgage broker for example, will shop the market to find you the best mortgage deal. With a preapproval in your back pocket you can begin to house hunt with confidence. Bottom line – financing won’t the the obstacle on any reasonable purchase to offer that you make.

Your mortgage preapproval will also motivate your real estate agent to house search on your behalf because they’ll know that the biggest hurdle to homeownership is already handled. It’s no surprise that the biggest disappointment to most failed homebuying transactions is inadequate financing. Your realtor will also know how much home you can afford so they can set their targets on properties that they know you’ve already qualified for.

Your real estate agent will also want to know other criteria that is important to you when looking to find a home that’s right for you. Your personal affordability is just one of those factors. Clearly, other considerations that may be important can include: Do you need to be near schools? Do you need to be near public transit or access to major highways? Do you need to be near shopping malls, parks, work locations etc.?

When she found that ideal home in your compared to make an offer, you may find this seller is more agreeable to your offer if they know that you are already financially qualified. It can be a bit of a poker game at the seller will treat your offer to purchase very seriously if they also know that you are a prequalified buyer. They may not want to call your bluff by counter offering with an offer that is far off what your offer is.

You’re going to have to qualify for mortgage sooner or later in doing it later once you’ve found a home only to get rejected is a big disappointment to say the least. By going through the mortgage application process in advance you’ll save yourself a lot of potential grief and embarrassment. Furthermore, you won’t be wasting a vendor’s time nor the time and effort of your realtor.

Another advantage to a mortgage free qualification comes in the form of an interest rate guarantee. This guarantee protects you from a general rise in mortgage rates between approval and the time you actually. You’ll appreciate this curing an environment of mortgage rate increases. The guarantee period will vary from lender to lender so be certain to check with your mortgage broker.
Being ready for your mortgage broker essentially boils down to being able to validate your income, assets and expenses.

It makes sense to provide your mortgage advisor with all necessary documentation and financial information during this preapproval process with special emphasis on proof of income and proof of your down payment source. You should also be prepared to authorize your mortgage consultant to do a credit check which is heavily relied upon by lenders.

Getting prequalified can be fairly straightforward if you have great credit, a good down payment and a stable employment history. If this describes your situation then you may still find a mortgage broker be useful because they have the ability to shop from a large array of lenders who will be eager for your business. You may find that you are offered an attractive mortgage rate that is below a lenders posted rate.

But if a mortgage could approval is not exactly a slamdunk in your case, then a mortgage broker can become an even bigger ally. The chronically self-employed intimately understand the frustration of applying for credit. This makes the mortgage prequalification all the more sensible allowing you the necessary time to validate information without the pressure of a deadline.

Once prequalified your mortgage broker will calculate the price range of properties you should be considering. And this next point is very important. Make your offer to purchase conditional on financing even if you’ve been preapproved for a mortgage.

The home will still require a market value appraisal to do for a lender will release funds. And expect the appraisal to be a conservative valuation. Obviously the mortgage lender cannot accept a property as security if the value is just not there compared to what they’re willing to lend to.

It’s simply more efficient for all concerned if you take the time to get your financing in place before you have sent. If there are any issues to work through then get them resolved before you make an offer on a property. The end goal is home ownership and getting your financail house in order first is the best approach to house hunting.