Mortgage Pre Approval – Now a Necessity

Mortgage pre approval is now a necessity as the credit market has changed significantly from what it was a few years ago. Before the financial meltdown, pre-approval was something most people didn’t even think about because getting a mortgage was as easy as walking down to the local bank branch and asking nicely. However, things have changed drastically and now most realtors advise home buyers not to even start looking for a property before they have mortgage pre approval.

Mortgage Pre Approval: Benefits to the Home Buyer

Despite the fact that mortgage pre approval is essential to get a home loan nowadays, it does offer the home buyer some benefits as well, namely under the guise of saving both time and money. First of all, when you have pre approval, you know exactly how much money you have to spend. This can save you huge amounts of time and aggravation because you can narrow down the number of properties you visit to the ones in your price range. At the same time, it’s easier to make a logical decision on how much you can afford to pay every month before you’ve actually found the “home of your dreams.” Once you’ve already seen the property you want, emotion can often take over and logic falls to the wayside so you either end up with a mortgage you can’t really afford, or completely disappointed when you receive approval for much less than you need.

Additionally, while mortgage pre approval does not guarantee in any way, shape or form that you will be approved for the loan, it still sends a message to the seller that you are serious and your offer has a much higher chance of being chosen compared to someone without pre approval. This gives you more negotiating power as well, because when a seller sees a buyer who has already been pre-approved, they know they aren’t wasting their time and the likelihood of the sale going through is very high.

Mortgage Pre Approval: Use Logicmortgage pre approval

There are cases where a lender might approve you for a higher monthly payment than you believe you can afford and you might be tempted to use the full amount. This would be a serious mistake because you are the one who will end up suffering when you have to tighten the purse strings every month to make the payment. Be realistic and analyze your budget. You are the only one who really knows how much you can really afford, no matter what a lender tells you.

Mortgage pre approval is actually an asset and will make your life much easier when shopping around for a home. Not only will you be in a better negotiating position because realtors and sellers will take you more seriously, but you will also be able to make a much better decision in terms of how much you can actually afford to spend. By getting pre-approved, you will know in advance how much money you have available, helping you save time, and you will also know exactly how much you can expect to pay in full for the property you intend to purchase.

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