When the market is hot it is important that buyers are prepared to move quickly once they submit an offer for a house. Having a preapproval handy is a way to tell the seller that you mean business. In some cases, a preapproval is required before you are even able to tour the home.
What is a mortgage preapproval?
A mortgage preapproval is simply a statement from a lender that documents how much a lender is prepared to let you borrow to pay for a home purchase. As long as the home you purchase meets the criteria of the loan it gives the seller peace of mind that your loan will come through. Sellers consider quite a few factors when deciding what offer to accept, so it’s important to come prepared.
Pre-qualification vs. preapproval
One of your first steps in searching for your dream home is often obtaining pre-qualification from a mortgage lender. A preapproval is the next step in the process where a lender will provide you with an offer for a specific loan amount (that typically lasts a particular period, often 90 days).
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What not to do during mortgage approval
The home buying process can take weeks to months & life happens, right? It’s easy to make changes without considering how they may impact your ability to close on the house you are purchasing. Here are a few things to NOT do between the time you obtain your preapproval & closing:
- Don’t apply for new credit
- Don’t miss any debt payments
- Don’t make any large purchases
- Don’t change jobs
- Don’t make large deposits without keeping a paper trail
Sometimes things are unavoidable, so be sure to keep your mortgage lender informed.
Have questions related to purchasing your first home? I’d love to walk you through the process. Hit the contact button & send me a note today!