Experts consider Mortgage Pre Approval as the verification of the borrower by lender, which determines whether the borrower is eligible for loan or not. Unlike prequalification, Pre Approval Home Loan is not just discussed at a meeting; it requires authentic information with proof, which can take several days. It also helps the lender to know exactly how much he will lend to the borrower.
Knowing what you can spend on a house beforehand has another benefit. You can save yourself (and your family) a tremendous amount of time look at homes that are outside your price range. If you have already picked out what you believe is the perfect house for your life circumstances before getting amount approved for a mortgage, these is the unfortunate possibility that you will not be able to afford it. This, itself, can be heartbreaking.
A real estate brokers is going to love the fact that you already have pre approval home loan and will work very hard for you to find the home you want! Why? Because they have a qualified buyer with the money in their pocket to buy! All they have to do is find a house that meets your requirements, in the price range you are approved for and they have a deal!
The last thing you need to provide is copy of driving license, SSN, and signature allowing the lender to pull a credit report. Once all the documents required the next thing is up to underwriter as he is the one who will get you a Pre Approval Home Loan.
This process may well serve as a wake up call in terms of what you thought you could afford and what you really can afford. The mistake that a lot of home buyers make when getting a mortgage pre approved is that they will spend the maximum amount they have been approved for. This is a mistake! Here is why. If the mortgage rates go up, and they will eventually, you will be surprised at how the rate increase can jack up your monthly mortgage payment. If the rates go up 40% then you can expect your monthly payments to increase by 30% or more depending on your amortization period, so it is wise to keep this in mind when you are calculating how much of a mortgage you are comfortable with. Ask yourself, if the mortgage rates go up unexpectedly, can we handle it! If you plan for the worst case scenario and it happens, you will be fine, if you don't your going to wish you have.
Knowing what you can spend on a house beforehand has another benefit. You can save yourself (and your family) a tremendous amount of time look at homes that are outside your price range. If you have already picked out what you believe is the perfect house for your life circumstances before getting amount approved for a mortgage, these is the unfortunate possibility that you will not be able to afford it. This, itself, can be heartbreaking.
A real estate brokers is going to love the fact that you already have pre approval home loan and will work very hard for you to find the home you want! Why? Because they have a qualified buyer with the money in their pocket to buy! All they have to do is find a house that meets your requirements, in the price range you are approved for and they have a deal!
The last thing you need to provide is copy of driving license, SSN, and signature allowing the lender to pull a credit report. Once all the documents required the next thing is up to underwriter as he is the one who will get you a Pre Approval Home Loan.
This process may well serve as a wake up call in terms of what you thought you could afford and what you really can afford. The mistake that a lot of home buyers make when getting a mortgage pre approved is that they will spend the maximum amount they have been approved for. This is a mistake! Here is why. If the mortgage rates go up, and they will eventually, you will be surprised at how the rate increase can jack up your monthly mortgage payment. If the rates go up 40% then you can expect your monthly payments to increase by 30% or more depending on your amortization period, so it is wise to keep this in mind when you are calculating how much of a mortgage you are comfortable with. Ask yourself, if the mortgage rates go up unexpectedly, can we handle it! If you plan for the worst case scenario and it happens, you will be fine, if you don't your going to wish you have.
About the Author:
Learn more about Mortgage Pre Approval. Stop by Sam Knight's site where you can find out all about Home Loan Pre Approval and what it can do for you.
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