Pre-Approval is the next important first step towards buying a home. Pre-approval simply means that a qualified lender will look at your credit history and income, compare it with your current monthly obligations, and see what you can realistically afford.
It does not mean you have already been approved for a mortgage, rather it is a predictor of the likelihood you will get one.
You may be asking yourself “But shouldn’t I find a home first?” No! While it may seem intuitive to proceed in that order, speaking with a lender before you start home searching is the best way to proceed.
HOW PRE-APPROVAL HELPS
• Avoid Disappointment: Pre-approval helps you know which houses you can realistically afford and warns you about any financial hurdles early on.
• Save Time: Knowing ahead of time what you can afford helps narrow the choices, which means you’ll find what you want faster.
• Plan Wisely and Establish Priorities: Understanding financial limits helps you focus on which of the features in a home are most important to you, and plan your search based on those criteria.
• Make Attractive Offers: Sellers know that a Buyer that has been pre-approved is a serious buyer.
• Smooth Closing: If there is something in your credit which could keep you from qualifying for the home you’ve chosen, it will be identified and dealt with during the pre-approval process and there will be no surprises when you go to close the deal on your new home.