Mortgage Pre-Approvals
Did you know that you can obtain a Mortgage Pre-Approval prior to purchasing a home?
The Mortgage Pre-approval process is one that can greatly improve the likelihood of a smooth purchase process.
The Importance of Being Pre-Approved
There are a few important things to know about getting Pre-approved for a Mortgage and why they can be a benefit to you. Here’s what you need to know:
Pre-approvals may be necessary to purchase a home with the help of a Realtor or through ComFree. Many Realtors and private sellers will want to know if you’ve been pre-approved before they work with you. Why is that? Because quality home buyers are qualified home buyers. If you’re not pre-approved, they don’t know if you’re wasting their time or not…and as we all know, time is money. If you are already pre-approved and can show a Realtor or a home seller that you are confident in your ability to purchase a home, you are more likely than someone who is not pre-approved to obtain the services of a good Realtor or the attention of someone selling a home that you want.
Pre-approvals can guarantee you an interest rate…for awhile. Many pre-approvals include "rate holds". That is, if pre-approved, you can look for a home with confidence knowing that your interest rate will not go higher than the rate offered to you at pre-approval. With many lenders, you may even qualify for a lower rate once you’ve actually found a place to buy. Typical rate holds are 120 days.
Pre-approvals are better than being “prequalified” In our experience, most banks that "prequalify" mortgage borrowers ask the following questions:
- How much do you make?
- How much do you owe?
The problem with those questions is there is no level of detail, and often people who have been "prequalified" find out after the fact that they’re not fully prepared to purchase a home. Unfortunately for them, they have invested time and money in finding a property – only to be disappointed. A full pre-approval process will ask those questions, along with more detailed questions about how you make your living, how long you’ve been making it, your plans for the future, your credit history, your ability to pay existing debts, and many more to give you, the borrower, a much more accurate depiction of your likelihood of being approved for a mortgage. This is the least we can do for you!
Other things to know about a mortgage pre-approval:
Pre-approvals are not a guarantee of financing! This is important to know because sometimes banks and brokers can give you that impression. The truth is, the preapproval process gives you and your broker a rough idea of what you will qualify for, and should identify any barriers to being approved for a mortgage like damaged credit, unverifiable income, or too much debt. A mortgage pre-approval can’t guarantee financing, but it gives you a much better idea if you will be approved.
Pre-approvals, like regular approvals, are subject to certain terms and conditions. These conditions usually include things like verification of income, verification of down payment, acceptable property type and location (which can’t be determined until you actually make an offer) and of course, honesty on the application.
If you are considering purchasing a home and would like to be pre-approved so you can purchase a home with confidence, or even just to obtain an interest rate guarantee, contact us or apply for a pre-approval today!
Mortgage Rates
| Term | Mortgage Rates |
| 1 Year | 2.60% |
| 2 Year | 3.09% |
| 3 Year | 3.49% |
| 4 Year | 3.89% |
| 5 Year | 3.89% |
| 7 Year | 4.99% |
| 10 Year | 5.35% |
| ARM / Variable | 2.05% |
| Line of Credit | 3.25% |
Last updated July 27, 2010
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