Financing Assistance

Many homebuyers miss out on one of the most important steps in the home buying process. No matter what type of real estate market, it’s a good idea to be pre-approved for a mortgage loan before the house hunting begins. Here are a few suggestions from the real estate experts at Coldwell Banker Residential Brokerage.

A pre-approved mortgage loan is a lender’s actual commitment to lend to the homebuyer, with specifications on the exact loan amount. To become pre-approved, consumers must provide personal financial information, such as income, debts and assets, to an underwriter. After a homebuyer applies for the loan, the lender will most likely approve the application with certain caveats. As the lender is committing to the loan amount and interest rate up front, the buyer knows they have their financing in place before begin shopping for a home. Advantages of having a pre-approved mortgage loan include:

A pre-approval letter gives the homebuyer an edge in a multi-offer situation. Sellers prefer working with potential buyers who are pre-approved; they do not want a deal to fall through because the purchaser cannot get sufficient financing. An offer with a mortgage pre-approval letter carries far more weight than an offer with only a pre-qualification letter or no letter at all. In fact, sellers often accept offers of lower dollar amounts from pre-approved buyers over buyers who have not been.

Working with a mortgage agent before looking at houses gives the homebuyer plenty of time to decide what category of mortgage product works best for his or her financial goals. Once the buyer decides on the kind of loan he or she wants and has been pre-approved for it, the homebuyer can then focus on finding their dream home.

Getting pre-approved for a mortgage enables the homebuyer to determine, prior to house hunting, how much money he or she qualifies for, thereby establishing a price range. The homebuyer can then focus on looking at appropriate homes.

By taking the time to seek pre-approval, the homebuyer can select a comfortable loan amount.