3 Reasons To Get A Pre-Approved For A Mortgage Loan
When you are considering buying a home, you may have a budget and price in mind. You probably start off looking at houses in your range and just weighing the options in the area. One aspect of the initial search you may overlook is getting a mortgage loan on a pre-approval basis. It's easy to say what you want to spend, but you need to know what you can actually receive in a mortgage loan. Here are three reasons to get a pre-approved mortgage loan before moving forward.
1. Working Numbers
The first reason you should try to get a pre-approved mortgage loan is for the numbers. The initial amount you are approved for, based on basic income and related information, gives you an idea of your limits. These limits seldom increase, which allows you to search for properties within the confines of what the pre-approval allows. It gives you more of a foundation, starting point, and reference to take with you to bank meetings or to your VA mortgage representative. They can take these numbers and work with them to give you the best options and sources for the money you need to get the home you want.
2. Obstacles with Mortgage
When you apply for a pre-approved mortgage loan, you won't just find out the limit of the loan they are willing to supply. You will also find out if there are any obstacles that will prevent you from getting the home you want. For example, you may be given a lower amount than you expected. This would leave you needing another source of finances to cover the cost of your home purchase. You may also find that your credit score is too low to get a decent pre-approved amount. A pre-approved mortgage loan letter can give you insight into this low score and give you time to improve your score to get a higher mortgage loan option.
3. Skipping Steps
If you decide to get a pre-approved mortgage loan letter, you will be able to skip several steps in the buying process later. For example, you may get a pre-approval in December with no set date for an intent to buy. In March, something may come up that means you have to quickly move. If you have a pre-approved mortgage letter, you can contact that bank and take the letter in. You can also give them the approval number. You can then choose a home and skip to the income proof and paperwork process since most of the basic credit checks will be done.
If you decide to move forward with a mortgage loan on a pre-approval basis, make sure to ask how long that pre-approval lasts. This will give you an idea of how long you have to move forward before needing to reapply. If you are ready to move forward, contact a mortgage loan company like Blue Wave Funding today.