| Why Getting Preapproved Is Important In The Mortgage Loan Process |
| Articles - Mortgage |
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When it comes to purchasing a new house, the most important step in the process is to get prequalified for a mortgage loan. Since the home loan industry is constantly changing underwriting guidelines, it is hard to know if you are approved for a home loan without completing an application. By getting preapproved for a home loan first, you are taking the guess work out of the equation.
When it comes to buying a new property, one of the most important steps in the process is to get preapproved for a mortgage loan. Since the home loan industry is always changing mortgage guidelines, it is hard to know if you are qualified for a mortgage loan without submitting an application. By getting prequalified for a home loan first, you are taking the guess work out of the equation. Many Real Estate Agents want to know that their clients are preapproved for a home loan before starting the house searching process. Some Realtors go as far as not working with anyone who is not preapproved first. It is crucial for the future homeowner to know that getting prequalified first is the most important step in the house buying process. Why get preapproved now? For starters, submitting a mortgage application will let you know where you stand now. If there is a credit mistake, you still have time to correct the error. A preapproval will also let you know what down payment is required, what your monthly mortgage payment will be and the maximum sales price of a property you qualify for. These are important things to know when shopping for a house. Credit Issues Many customers do not know what items are on their credit report until it is too late. By completing a loan application first, if there is any negative or incorrect information on your credit report, you will have time to repair the issue. Several credit repair companies take up to 45 days to correct inaccurate information. It can take up to 3 to 6 months to get all three bureaus to update with the revised information, so by starting the prequalification process first, if there is an issue, you will have time to address the problem. Know Your Down Payment Requirement A preapproval will let you know how much of a down payment is required to purchase a home. Since there are several different mortgage loan programs from FHA home loans to conventional home loans with each requiring a different amount for a down payment, it is crucial to know how much money you will need for the home closing. This will also give you time to prepare for the closing by saving money for the down payment. Know Your Monthly Loan Payment Preapprovals also give you an idea of what your monthly mortgage payment will be. This will help you set up a budget and prepare for the house payment. Also, a loan consultant can assist you with loan options that can affect the monthly payment. Know What Your Can Purchase The most important part of the prequalification is knowing how much you can buy a property for. You need to know what the maximum sales price of a house you qualify for. This way, you only are looking for houses that meet your budget. Let The Seller Know You Are Serious By getting preapproved for a loan upfront, you are letting the seller know you are a serious buyer. If there are two offers to buy a property and one offer has a preapproval letter, the seller is most likely going to accept the offer with the preapproval letter. By being a prequalified buyer, you set yourself apart from those that wait until the final moments to get approved for a mortgage. By talking with a mortgage officer and getting preapproved today, you will have a better idea of where you stand in your home purchasing process. DISCLAIMER: This article is provided as information only and is not to be taken as financial advice. David White is a Senior Mortgage Consultant who assists clients with purchase home loans. David has over 12 years experience with mortgage loans and understands the loan industry. Unique version for reprint here: Why Getting Preapproved Is Important In The Mortgage Loan Process. |