When you begin the home buying process, you will hear time and again the importance of obtaining a PreApproval Letter prior to starting your home search. However, understanding the PreApproval is not such a common topic of conversation.
Here are 3 tips of making your PreApproval work for you:
Make sure you obtain a PreApproval, not a PreQualification. Getting prequalified for a mortgage gives you an estimate of what you can afford, but does not include the pulling of credit. Realtors and home sellers will want to see a PreApproval, which provides a much more accurate estimate.
Have your PreApproval Letter adjusted to reflect the offer you are making. Though you may be PreApproved for a $200,000 mortgage, you may only want to offer $170,000 on a home. Have your mortgage lender adjust your letter to accurately portray what you are offering. This way, you will avoid inadvertently swaying a counter offer just because a seller knows you can pay more.
Follow the Dos and Don'ts of Getting a Mortgage to make sure your letter remains accurate. Don't forget that your finances will be carefully reviewed during the mortgage process by your processors and underwriters, so make sure you aren't changing your financial picture mid-stream.
We are here to help! If you are ready to start house hunting, contact us! One of our experienced Mortgage Advisors will help walk you through the mortgage process.