Greetings, fellow homebuyers! Finding the perfect home can be an exciting prospect, but it can also be overwhelming, especially when it comes to financing that dream home. Fortunately, pre approval home loans can make the process of home buying much smoother. In this article, we will be discussing the best pre approval home loan options available to help you find the right financing for your dream home.
What Is a Pre Approval Home Loan?
Before we dive into the best pre approval home loan options, let’s first understand what pre approval home loans are. A pre approval home loan is a preliminary approval from a lender that indicates how much money you are eligible to borrow for a home purchase. It is based on your income, credit score, and other financial information. Pre approval home loans can help you determine your budget and give you an edge in a competitive housing market.
Pre approval home loans are different from pre qualification home loans, which are only an estimate of the amount you may be able to borrow. Pre approval home loans, on the other hand, are a more accurate evaluation of your borrowing power and can give you more leverage in negotiations with sellers.
The Best Pre Approval Home Loan Options
Now that we know what pre approval home loans are let’s explore the best pre approval home loan options available:
Lender |
Interest Rate |
Loan Term |
Loan Amount |
|---|---|---|---|
Quicken Loans |
2.5% |
30 years |
$50,000-$3 million |
SoFi |
2.25% |
30 years |
$100,000-$3 million |
Wells Fargo |
2.75% |
30 years |
$75,000-$5 million |
1. Quicken Loans
With an interest rate as low as 2.5%, Quicken Loans is an excellent option for borrowers with a minimum credit score of 620. The lender offers both conventional and government-backed loans, including FHA, VA, and USDA loans. Quicken Loans also has an easy-to-use online pre approval process that can give you a decision within minutes.
Quicken Loans also offers a RateShieldTM Approval, which locks in your interest rate for up to 90 days while you search for a home. This feature can protect you from interest rate fluctuations and give you time to find the perfect home.
2. SoFi
SoFi is an online lender known for offering competitive interest rates, and its pre approval home loans are no exception. With an interest rate as low as 2.25%, SoFi is an excellent option for borrowers with a minimum credit score of 680. The lender offers both conventional and jumbo loans, and borrowers can receive a pre approval decision within minutes.
SoFi also offers an underwriter review within 24 hours, which can expedite the closing process and ensure a more seamless home buying experience. As an added bonus, SoFi offers an unemployment protection program that allows borrowers to pause their payments if they lose their job.
3. Wells Fargo
Wells Fargo is a traditional brick-and-mortar lender that has been in the home loan business for over 160 years. With an interest rate as low as 2.75%, Wells Fargo can be an excellent option for borrowers with a minimum credit score of 620. The lender offers both conventional and government-backed loans, including FHA and VA loans.
Wells Fargo also offers a PriorityBuyer pre approval program, which gives borrowers a more accurate estimate of how much they can borrow. The program also includes a credit decision within one business day and a dedicated mortgage consultant to guide you through the process.
FAQs About Pre Approval Home Loans
1. What’s the difference between pre qualification and pre approval?
Pre qualification is only an estimate of how much you may be able to borrow, while pre approval is a more accurate evaluation of how much you can borrow. Pre approval requires a full credit check and evaluation of your financial information, while pre qualification does not.
2. How long does pre approval last?
Pre approval typically lasts for 60-90 days, but the exact length can vary depending on the lender.
3. Can I still get pre approved if I have bad credit?
It may be more challenging to get pre approved with bad credit, but it is still possible. Some lenders may require a higher down payment or charge a higher interest rate.
4. How much does pre approval cost?
Most lenders do not charge a fee for pre approval, but some may require an application fee or credit check fee.
5. Is pre approval guaranteed?
No, pre approval is not guaranteed. A lender may withdraw their pre approval if your financial situation changes before closing.
6. Can I still shop around for a better interest rate after I’ve been pre approved?
Yes, you can still shop around for a better interest rate after pre approval. However, be sure to do so within the pre approval period to avoid multiple credit inquiries that can harm your credit score.
7. Can I use pre approval for a new construction home?
Yes, you can use pre approval for a new construction home. However, the pre approval process may differ from that of an existing home.
Conclusion
Now that you know the best pre approval home loan options available, you can make a more informed decision when it comes to financing your dream home. It’s essential to consider factors like interest rates, loan terms, and loan amounts when choosing a pre approval home loan. Remember to shop around and compare multiple lenders to find the best option for your unique financial situation.
Don’t wait any longer to start the process of buying your dream home. Apply for pre approval today and take the first step towards homeownership!
Closing Disclaimer
The information provided in this article is for educational purposes only and should not be considered financial advice. Please consult with a licensed financial advisor before making any financial decisions.