Why Is a Home Loan Pre-Approval Useful?

A pre-approval is the first step in the mortgage application process. Home loan pre-approval helps you get a better idea of what size and type of mortgage you might qualify for in advance of submitting your official mortgage application. With this information in hand, you can better plan and prepare financially for meeting your homeownership goals.

 

Once you have an idea of your borrowing power and what type of mortgage you may qualify for, you’ll have a better sense of what size monthly mortgage payment you can afford.  Having the knowledge to determine your budget is an essential part of a successful home search.

How Does Pre-Approval Work?

When getting pre-approved, you provide your lender with a picture of your financial situation (debt, income, and assets) so the information can be used to give you an idea of your home loan qualifications. While pre-qualification is different from submitting a full mortgage application and doesn’t guarantee you will be approved for a loan, it is an immensely useful tool in the home buying preparation process.

What are the Different Types of Pre-Approvals?

Pre-Qualification 
A pre-qualification consists of verbally informing your loan officer of your income, savings, and assets. Your loan officer will also run your credit.

Pre-Approval
A pre-approval consists of providing your loan officer with your pay stubs, bank statements, W2’s, and running your credit. 

Credit Approval with Home Buyer’s Edge
A credit approval requires the same documentation as a pre-approval; however, an experienced underwriter will review your financial situation instead of your loan officer. As a result, the full credit approval is a complete, upfront vetting of your finances by an underwriter.

Verifying your income, assets, and credit proves that you’re a qualified buyer, and you’ll have a competitive advantage over other bidders by providing the strongest offer.

Get Pre-Approved For A Mortgage Today

Learn how much you can afford and which mortgage program is right for you. We’ll provide you with a free pre-qualification and consultation to discuss your financial situation, so we can find the program that best meets your needs.