Obtaining a mortgage pre-approval is a valuable use of your time when beginning the process of purchasing a home. Pre-approval indicates that a lender has agreed to offer you a loan for buying a home, and involves several steps such as confirming your income, expenses, and overall eligibility.

Having a pre-approved mortgage is an essential step toward buying a home. In fact, it’s recommended that you obtain pre-approval before even starting to search for a house. Here are five reasons why getting pre-approved for a mortgage is highly recommended.

1. Create Leverage For Negotiation As A Buyer

Mortgage pre-approval from a lender means that they have agreed to lend you the money for a home purchase, as long as your financial situation remains the same. This is crucial information for home sellers because they want to know if a buyer is serious and eligible before considering their offer. With pre-approval, the seller knows that you are already qualified to make an offer, and they can feel more confident in negotiating with you.

As a buyer, getting pre-approved for a loan makes your offer stronger and more secure. Sellers often receive multiple offers, so they are more likely to choose a buyer who is ready with a loan and can move quickly through the process.

2. Fully Understand What You Can Afford

Obtaining pre-approval for a mortgage prior to beginning your search for a home is essential because you will know how much you are eligible to borrow, this makes the search for your new home easier and more enjoyable.

For example, if you find a home that you love priced at around $400,000 but your lender can only offer $300,000, there is a significant gap that could cause frustration. Knowing the type of home you can afford will remove those frustrations and let you focus on homes that fit your search criteria.

3. Secure The Best Mortgage Rate Possible

When you work with a mortgage broker for pre-approval, you can also lock in the available interest rate. It is advisable to lock in the lowest rate possible before interest rates increase in your area. Pre-approval can help you achieve that.

If you consult a mortgage broker, they can provide information about how long you can secure a rate and what future trends might look like. Your mortgage lender will work quickly to find you the most competitive rates at that moment. Acting swiftly can protect you from sudden interest rate hikes. One of the advantages to working with Sword Mortgage is that we are able to rapidly complete your loan process, call (111) 111-1111 or use our online form to see if you pre-qualified today.

4. Reduce The Risk Of Unforeseen Issues Later Down The Road

The purpose of pre-approval is to ensure that you meet the requirements for a loan. Some factors may delay this process, such as the need to provide tax records as proof of income, or resolving any judgments on your credit report that may affect your credit score. By partnering with a mortgage broker at an early stage, they will identify such issues and provide you with sufficient time to address them.

Obtaining mortgage pre-approval gives you the confidence to proceed with your home purchase without any uncertainties. This helps you avoid complications in the later stages of the home-buying process. As some sellers may have timeline restrictions, it’s important to avoid avoidable delays and obstacles.

5. Save Time, Close Faster!

After you make an offer and it gets accepted for your dream home, the time it takes during the closing process may vary. The underwriters and mortgage broker will need to complete several steps, but you can also take action to speed up the process. It’s important not to do anything that might cause delays. If you have a pre-approved mortgage, the process will be slightly different.

Since you’ve already been pre-approved, the mortgage broker doesn’t need to search for information or help you get approved; that’s already taken care of. Their job is to review the accuracy of the information and make sure your finances are still in order. This will speed up the closing process and allow you to move into your new home sooner.

Are You Wondering How You Can Get Pre-Approved For A Mortgage?

Securing a mortgage pre-approval can be made simpler by collaborating with a mortgage broker and providing all the requested information. This typically includes:

• W-2 statements
• Bank statements
• Credit reports
• Personal identification information
• Tax returns
• Reference letters

After they receive your information, they will verify your qualifications and identification. You will be notified shortly afterward if you qualify for a loan and the amount you can borrow.