The Benefits of Getting Pre-Approved

What does it mean to get pre-approved?

There are many benefits of getting pre-approved that you should know about before you begin searching for a home. This is a very important first step and it helps you determine how much you can really afford to spend on a home. Getting pre-approved requires that the lender verify your financial information and serves as a commitment to lend a specified amount based on that information you provided. As a result, this gives you significant buying power with a seller who recognizes you will be approved for a loan. Preapproval is as close as you can get to confirming your creditworthiness without having a purchase contract in place.

You will complete a mortgage application and the lender will verify the information you provide. They’ll also perform a credit check. If you’re preapproved, you’ll receive a preapproval letter, which is an offer (but not a commitment) to lend you a specific amount, good for 90 days.

What does it mean to get pre-qualified?

Be the First to Know

Getting pre-qualified is basically an informal discussion between a borrower and a lender. The lender estimates the amount that you can borrow based solely on what you tell them about your income and assets. The lender does no verification of your employment, income and credit, and is not bound to make the loan when you are ready to buy. Seller will see you as a serious buyer.

How is Getting Pre-approved the Better Option?

To a seller, a lender’s pre-approval letter is considerably stronger than a pre-qualification letter. Loan pre-approval is based on documented and verified information regarding your employment, your income, your liabilities, your assets and the cash you have available to close on a home purchase. If a seller knows your financing is secure, your offer is stronger. You are a more powerful buyer. There are many benefits of getting pre-approved.

Benefits of Pre-Approved 

A Transaction Tool.

Sellers will look at you as a stronger buyer (in essence a cash buyer). If a seller has more than one offer, you could win (at no cost).

A Definite Time Saving Tool.

You have a definite picture of what you can afford versus an estimate. You won’t spend hours inspecting homes you can’t afford to buy.

It Will Give You Peace of Mind.

You will know upfront what the home will cost you. There’s no point in falling in love with something that you cannot afford to buy in the first place.

Better Bargaining Power

With a pre-approval letter in hand, you will likely have more negotiating power because sellers and real estate agents know that you have already talked to a lender and you mean business.

Save Yourself Some Time

Getting pre-approved can also save you valuable time by identifying how much you can afford, so you can target your home search to your price level. This also allows you to focus on the features of the home rather than worrying about the price tag.

Reduce Surprise

Talking to a Lender and loan officer before finding your perfect home can help ensure you’re not surprised when it’s time to make an offer. Getting your ducks in a row early will leave little room for unexpected surprises – such as a low credit score or a less than desirable debt-to-income ratio – when you find the home you’ve been looking for.

Enjoy Shortest Closing Period

A pre-approval can help to speed up the closing process, since much of your financial information is already collected and in the lender’s system. Most sellers and listing agents prefer shorter escrow period. Shorter closing period means your offer is more acceptable to the seller.

Getting Pre-Approved For Your Home Loan Before You Begin House Hunting Can: 

• Move you one step closer to home ownership. Great benefits of pre-approved.
• Learn the home loan amount you may be able to afford.
• Provide confidence in your ability to obtain financing.
• Demonstrate your creditworthiness to the seller for the purchase amount.

How Long Does Pre Qualification or Pre Approval Take?

Aside from their distinct roles in homebuying, prequalification and preapproval can take different amounts of time. Prequalifying at Star Home Loan is a quick process that can be done online, and you may get results within an hour. For mortgage preapproval, you’ll need to supply more information so the application is likely to take more time. You should receive your preapproval letter within 10 business days after you’ve provided all requested information.

Benefits of Pre Approved – Apply Today

Start the pre-approval process with Star Commercial Home Loan today so you can start creating memories in your new home. Call Loan Officer Faruk Now at (562) 213-8892 for your pre approval. Free consultation, no obligation. There are many benefits of pre-approved. Contact Loan officer for a quick pre-approval.