Mortgage Pre-Approvals Are a Valuable Tool for Understanding What You Can Afford

by Danielle Pierro 06/06/2021


 Photo by Clker-Free-Vector-Images via Pixabay

A mortgage pre-approval can be a valuable tool for understanding how much you can afford to spend on purchasing a home. It can also make you seem much more attractive to sellers and help to identify any potential problems that may make it difficult to get a loan. In fact, many lenders claim that if a buyer isn’t pre-approved for a mortgage, they will have a difficult time navigating the real estate market. But what does pre-approval really mean?

What is a Mortgage Pre-Approval?

While it can sound like you’ve got a sure thing locked in when you’re pre-approved for a mortgage, being pre-approved doesn’t promise that you’ll be able to secure a loan for the home that you want to purchase. A mortgage pre-approval simply means that a loan officer has reviewed your finances and decided how much money you're allocated to borrow, what you should be able to pay each month towards your mortgage and what your interest rate will be.

Once, you’ve been pre-approved by a lender, you will get a letter that can be shown to sellers. This letter indicates that you’ve already established a working relationship with a lender. This helps to give sellers peace of mind in knowing that you’re serious about putting in an offer on their home, and they don’t have to risk wasting time with a buyer who isn’t serious.

What Are the Benefits of Getting a Pre-Approval?

A pre-approval doesn’t guarantee you’ll get a mortgage but it does offer a few key advantages during your search for the ideal home. It helps to give you confidence while looking at potential properties, as you look at homes that are within your budget. There’s no need to fall in love with a home that you can’t afford. Additionally, it establishes credibility as a buyer, showing that you have your finances under control and can help to put you on the fast-track to closing once you’ve found the perfect home.

Are Pre-Approval & Pre-Qualified the Same Thing?

Unfortunately, no. These two similar real estate terms are not interchangeable. When you are pre-qualified for a mortgage, this indicates that you have given your lender information regarding your income, debts and assets. Without doing further research, the lender then tells you that you should qualify for a certain mortgage. Pre-approval is a much more in-depth process, requiring your lender to verify the financial information provided by pulling your credit history, as well as verifying your income and assets.

About the Author
Author

Danielle Pierro

I don’t just sell Real Estate, I sell PARADISE! 

As a Top Producer in Flagler County (Florida’s “Hidden Gem”), I'm passionate about Real Estate, and I LOVE what I do! I'm dedicated and committed to helping people find their dream home in Paradise, and equally as dedicated in helping to sell their home as quickly and stress free as possible. I consistently provide the highest level of service and an exceptional customer experience throughout the entire process.

I have achieved many prestigious awards resulting from hard work and dedication to my profession…..proving hard work really does pay off! Please call me, Danielle Pierro, at 914-760-0364 and let me help you with all of your Real Estate needs!

2019/2020 Board of Directors of the Flagler County Association of Realtors

Founder and VP of Flagler Business Professionals LLC – Networking Group