Are you thinking about buying a home and want to start exploring financing options? That's great! You've completed your first step. For most of us, a home is the biggest purchase we’ll ever make, so fully understanding the home loan process is very important. Your next step is to find a lender you can trust to help you make good homebuying decisions – one of those being pre-approval.
Why is pre-approval so important?
Pre-approval can put you ahead of the curve when it comes to making an offer on a home. Some sellers consider a pre-approved loan as attractive as someone making a cash offer. Many sellers prefer to only entertain offers from pre-approved buyers. They don't want to spend the time and energy negotiating a transaction to have it fall short at the last minute due to a lack of financing.
Let’s take a deeper dive into how pre-approval can help you when buying your home.
Pre-approval lets you know how much home you can afford.
It can be easy to get wrapped up in the excitement of finding the perfect home, but it’s important to focus on the houses that make the most sense financially. Getting pre-approved gives you a solid understanding of what you can afford, what you’ll be able to borrow and your overall budget. Knowing how much you can spend keeps you from wasting time looking at homes that aren’t in your pre-approved price range. Your lender can also give you the terms of your loan when you go through the pre-approval process with them.
Gain a competitive edge over other buyers.
When you’re pre-approved, you can act quickly to make an offer on a home that meets your needs and budget. Sellers want to know that a buyer is serious and prepared to make a clean offer without financial obstacles getting in the way. Pre-approval provides that for you. You can make your offer on a home with confidence, and gain an edge over buyers who don’t yet have financing in place.
In addition, real estate agents are more excited to work with buyers who know the price range of a home they can afford. Their time is valuable – and so is yours. It’s better to meet with them when you have a solid financing plan in place.
You’ll know if there are any roadblocks that could affect your buying power.
When you meet with a lender for pre-approval, they’ll review your credit history, gross income, assets and debts. These factors can affect the loan amount you’ll qualify for. It’s important to pay down debts, save for a larger down payment and resolve inaccuracies on your credit report before making an offer on a home. You should also consider your daily, weekly and monthly expenses when determining your budget.
Your mortgage loan could potentially close faster.
Compared to a buyer who isn’t pre-approved, you could have a faster closing time. Since much of the paperwork and verification has already been completed, it can significantly speed up the closing process. Atlantic Union Bank offers our Certified Buyer Pre-Approval Program that can have your loan closed in as little as 10 business days after pre-approval. We fully underwrite your loan to determine how much you could be approved for by verifying your information and documentation.
If you’re already working with a loan officer, contact them to discuss your pre-approval options. If not, Atlantic Union Bank has a team of dedicated and knowledgeable mortgage loan officers ready to help you find the right product for your needs.
Learn more about our pre-approval options, including the Certified Buyer Pre-Approval Program, or schedule an appointment to meet with one of our mortgage professionals.
Sources: NJ Lenders Corp. Mortgage Bankers, Capital Bank Home Loans