Benefits of Getting a Pre-Approval
When you are buying a home and going through the mortgage process, things need to be done in a timely manner in order for it to run smoothly. One of the most helpful things that you can do is get a mortgage pre-approval before entering into a contract with a seller. Our expert Alberta mortgage broker team is here to tell you why it's beneficial to you.
It Will Save You Time
When you start shopping around for a home, it helps to know what your budget is. When you get a mortgage pre-approval, you have a solid idea of how much a lender is willing to fund you for a mortgage. This means you won't be wasting time looking at homes that you won't get mortgage approval for.
If you have ever put a bid on a home and then found out you can't get approved for the amount needed, you know how disappointing it can be. When you have a mortgage pre-approval, you already know what funding a lender is willing to give you. To get a pre-approval, you have to go through credit checks and submit documentation. You are basically beginning the mortgage process ahead of time, rather than starting it after you put a bid in on a home. It means less chance of a sale falling through at the last minute.
It Gives You An Advantage
When you have a mortgage pre-approval, you have an advantage when it comes to bidding on a home over those who don't have a pre-approval. Most sellers and real estate agents prefer to go with a buyer who has been pre-approved for a mortgage loan. It not only shows them that you are serious about buying the home, but it also ensures that there won't be unexpected issues when it comes to closing. Having a pre-approval also gives you some room for negotiation, for example making a bid that is a bit under the asking price. More times than not, a seller will go with a buyer who has been pre-approved.
It Helps Close the Deal Quicker
When you have a pre-approval, you have already gone through the part of the mortgage process where lenders have reviewed your finances. This means there is less of a wait at closing. As long as you have met all of the terms and conditions of the pre-approval, things should go smoothly. It's important to keep in mind that a pre-approval is not the same as a pre-qualification. A pre-qualification is an estimate of what you could be approved for once you start the mortgage process. It won't guarantee that amount or the terms of the mortgage. If you make a bid on a home with a pre-qualification, you still run the risk of not getting approved, and you will still have to go through the full mortgage process, which takes more time.
Your financial circumstances, salary and employment will have already been verified when you have gone through a pre-approval. It means that home appraisals can be done quickly and it can cut down the typical 30-day waiting period to just 14 days.
As you can see, there are many benefits to getting a pre-approval before you start looking for a home. It will give you that edge needed for bidding on a home, especially in a competitive market. If you have any questions about getting a pre-approval, or you want to start your pre-approval process, give our expert Alberta mortgage broker team a call today!