When you choose to start hunting for houses, a good mortgage professional will advise you not to start with a meeting with a realtor. You should seek the services of a mortgage expert to help you determine how much mortgage you can qualify for. It is the purpose of mortgage pre approval, in simple terms.
The process of mortgage pre-approval involves different stages and should not be confused with pre-qualification. In pre-qualification, you will not be provided with adequate information regarding the mortgage amount; you will be loaned. That’s its major difference with mortgage Pre approval.
Things You Need to Know about Mortgage Pre Approval
- It is a process
The Pre-approval process is a process where the potential lender determines whether you are eligible for a home loan and at what amount. You should start the pre-approval process. Usually, 60-120 days, to be able to lock in an interest rate. The amount in a pre-approval is the maximum mortgage amount you can get.
You will need to provide the lender with relevant documents as proof of income, identification, information on your assets and debts, etc.
- Qualification for a Pre- Approved Mortgage
Once you have provided the bank with all the necessary information and documents, they will assess your financial position. You may need to provide them with recent financial statements of your investments and even account. They will use this information to determine the amount they will lend you and at what interest rate.
The amount of the pre-approval is not guaranteed. You can only lock in a particular interest rate.
- Factors that may affect your pre-approval process
While still going through the pre-approval process, you should ensure that your actions do not affect your cash flow. If you take a loan or lose your job, it will change your position and possibly, the potential to qualify for a pre-approved mortgage.
Ensure that your financial position remains stable from the start of the pre-approval process to the time you make an offer on a particular property. This way, you ensure and strengthen your case and chances of qualifying for a mortgage.