Buying a home is a big step that many of us can feel overwhelmed by. But one of the best ways you can prepare yourself before you begin actually looking at homes to purchase is obtaining a mortgage pre-approval. A mortgage pre-approval is a document from a lender that tells you how much mortgage you’ll be pre-approved for. Note though, that a mortgage pre-approval can expire.
Why is getting a mortgage pre-approval so important?
When it comes to a mortgage pre-approval, not just any one will do. Sometimes, lenders don’t take the proper steps and will pre-approve you for an amount they definitely will not actually give you later because they didn’t do the proper financial health checks on you.
When you do obtain a mortgage pre-approval, ensure that you provide the lender with a driver’s license or other ID for proper identification, a letter from your employer that confirms your salary, proof of your financial assets and financial liabilities (such as debts or credit cards), along with proof of your ability to pay your down payment and closing costs.
A mortgage pre-approval will tell you what you can afford to spend, as well as how much wiggle room you might have when it comes to making an offer on a home. Having a mortgage pre-approval also lets the seller and their agent know you came prepared and are serious about your offer – there have been many instances where an offer was made but eventually fell through because the amount wasn’t pre-approved.