Get the House You Want with Pre Approval
Welcome, dear reader! If you’re reading this article, then you might be wondering what exactly is a home loan pre approval and how it can help you in buying the house of your dreams. Well, look no further as we delve into everything you need to know about home loan pre approval. From the basics to frequently asked questions, we’ve got you covered. Let’s get started!
What is a Home Loan Pre Approval?
A home loan pre approval is a conditional approval granted by a lender that indicates the amount of money you can borrow for a home loan. This conditional approval is based on an assessment of your financial and personal information.
How is a Home Loan Pre Approval Different from a Pre Qualification?
Many people often confuse pre approval with pre qualification. While pre qualification is a good first step, it’s not a guarantee that you will receive the loan. Pre approval on the other hand is a more thorough and formal process that involves a lender assessing your financial details to give you a conditional approval to secure a loan.
The Benefits of a Home Loan Pre Approval
Getting pre approved for a home loan has numerous benefits such as:
Benefits |
Explanation |
|---|---|
Knowing Your Budget |
Pre approval gives you a clear idea of the amount you can borrow for a home loan. |
Increased Negotiating Power |
Sellers are likely to take you more seriously when they see that you already have pre approval for a mortgage. |
Quicker Process |
With a pre approved loan, you can significantly speed up the home buying process. |
Less Stressful Buying Experience |
You’ll have more confidence in the buying process since you already have an idea of how much you can afford. |
The Pre Approval Process
Getting pre approved is not a difficult process as long as you have all the necessary information required by the lender. Here’s a step by step guide on how it works:
Step One: Pre Qualifying
The first step in the pre approval process is pre qualifying. This involves providing the lender with your income, debts, assets, and credit score to get an estimate on how much you can borrow.
Step Two: Documentation
The next step is documentation. This involves providing the lender with all the necessary paperwork such as tax returns, bank statements, proof of income, and identification.
Step Three: Credit Check
The lender will conduct a credit check to assess your credit score and history.
Step Four: Property Appraisal
The lender will assess the property you want to buy to ensure that it meets their criteria.
Step Five: Conditional Approval
After completing all the steps, the lender will give you a conditional approval, which means that you’re approved for a specific amount of loan pending a satisfactory property valuation.
FAQs
1. How long does pre approval take?
The pre approval process can take anywhere from a few hours to several days depending on the lender’s requirements.
2. Does pre approval affect credit score?
Pre approval doesn’t affect your credit score since it’s considered a soft inquiry.
3. How long is pre approval valid?
Pre approval is usually valid for 60-90 days depending on the lender.
4. Can you get pre approved without a property?
Yes, you can get pre approved without a property.
5. Can pre approval be denied?
Yes, pre approval can be denied if the lender discovers any discrepancies or issues with your financial and personal information.
6. Can you have multiple pre approvals?
Yes, you can have multiple pre approvals as long as you don’t exceed the maximum borrowing amount.
7. What happens after pre approval?
After pre approval, you can start shopping for properties within your budget. Once you’ve found a suitable property, you can apply for the loan and undergo further assessments by the lender.
Conclusion
In conclusion, getting pre approved for a home loan is an essential first step in the home buying process. It’s a valuable tool that can save you time and money while giving you the confidence to negotiate with sellers. We hope that this article has given you a better understanding of what home loan pre approval is and how it works. So, what are you waiting for? Get pre approved today and start your journey to finding your dream home.
Disclaimer
The information provided in this article is for informational purposes only and should not be taken as legal or financial advice. Users must always make their own inquiries and seek independent professional advice before making any decisions regarding home loan pre approval.