House Hunting? Here’s Why You Should Get Pre-Approved First:
June 19, 2023
By Julie Schmidt • VP of Mortgage Lending
Finding the right home is exciting, but before you start searching there’s something important you need to do: get pre-approved for a mortgage loan.
It might sound like a fancy term, but it’s actually a crucial step that makes house-hunting easier.
What does a pre-approval mean?
Getting pre-approved for a mortgage means ...
- You’ve contacted a mortgage lender before making an offer on a home.
- You’ve completed a mortgage application.
- A loan underwriter has verified your financial documents and made a commitment to provide a loan up to a certain amount, for a certain time period and other possible requirements.
Why it's a good idea to get pre-approved:
If you're thinking about buying a home, don't wait. Why? Here are a few reasons getting pre-approved is so important:
- It shows sellers that you're a serious buyer. When you're competing with other buyers for a home, having a pre-approval letter can give you a leg up. It shows sellers that you're serious about buying and that you've already been approved for a loan. This makes sellers more likely to accept your offer.
- It gives you an idea of how much you can afford. Before you start looking at homes, it's important to know your budget. Getting pre-approved will give you a good estimate of what your final monthly payments will look like. This will help you narrow down your search and avoid wasting time looking at homes that are out of your price range.
- It speeds up the closing process. Once you find the perfect home and make an offer, things need to move quickly. Having a mortgage loan pre-approval gives you a head start in the closing process, since a lot of the paperwork has already been completed during pre-approval. This saves you valuable time and increases the chances of closing the deal smoothly and quickly.
- It gives you confidence. House-hunting can be stressful, especially when you’re unsure if you qualify for a loan. But with pre-approval, you can feel more confident. It’s like having a permission slip that says you can buy a house. You’ll know that the Bank believes in you, and it takes away the worry of not being able to get a loan.
- It can save you money. Once you're pre-approved, your mortgage lender can help you get a better understanding of the current interest rate environment and whether or not you want to lock in a lower rate. A pre-approval will also give you a stronger negotiating position when you're ready to make an offer on a home, which can potentially save you thousands of dollars.
How to get pre-approved for a mortgage
Getting pre-approved for a mortgage is a simple process. You'll need to provide your lender with some basic information, such as your income, debt, and assets. They'll then use this information to determine how much money you can borrow.
At Security National Bank, you can apply for pre-approval online or visit with a mortgage lender and apply in person. Just take a few minutes, answer a few quick questions and submit your application, so you can go house-hunting with confidence — and a trusted, local pre-approval letter in your hand.
Here are some additional tips for getting pre-approved for a mortgage:
- Shop around for the best lender. There are many different mortgage lenders out there, so it's important to look around and compare the type of service you receive. For example, you might find a local Bank to be more responsive, compared to a bigger national bank that focuses more on loan volume.
- Ask about closing costs. Closing costs are the fees associated with buying a home, in addition to the regular loan. They can add up, so be sure to ask your lender about them upfront.
- Ask about first-time homebuyer programs. There are government programs designed specifically to help people who are buying a house for the first time. They feature low down payments, grant funds tax credits and subsidized interest rates. A good mortgage lender can help break this all down for you and help you save money.
Want to know more?
Visit our free Financial Learning Center, where you’ll find short, interactive guides on considering homeownership, credit scores, the homebuying process, types of mortgages and more. Start your journey to homeownership today!
Are you ready to start house-hunting?
Contact one of our mortgage lenders today.