Get a Mortgage Pre-Approval
An important ingredient in a successful home search is knowing how much your bank or mortgage lender is willing to lend you. You don’t want to fall in love with a property only to find out it’s outside the price range they are willing to lend.
It’s always a good idea for anyone to get a Mortgage Pre-Approval. This is a document from your bank or other lender stating how much of a mortgage they are willing to lend you. Three advantages to getting this pre-approval are:
- It gives you the peace-of-mind of knowing what price range homes we should be looking at.
- It’s a sign to sellers that you are a serious, prepared buyer – which gives you an edge when making an offer. Most sellers in today’s market will want to see that letter submitted with the offer before they consider signing off on a contract and taking their home off the market for that buyer.
- In a multiple offer situation, the buyer who hasn’t been pre-approved can be at a huge disadvantage if the other buyers are able to submit their lender letter along with their offers.
How Much Will a Lender or Bank Lend You?
Banks and lenders use specific criteria to determine how much of a mortgage they’re willing to offer you. They look at your income, expenses, credit history and employment status, as well as the down payment you plan to make on a home. It may seem like a scary process, but it is actually pretty straightforward. You can usually get a Mortgage Pre-Approval in a day and you’ll be glad that you did.
By knowing what your lender will lend you, you can confidently shop within that price range. For example, if you qualify for a $250,000 mortgage, and you have another $50,000 available as a down payment, you can look for homes in the $300,000 range. Not all buyers, however, choose to put that much money down. There are all kinds of loans available. Most likely, there will be one that fits your needs.
Have questions about arranging financing? Please submit the form below or call or email me.