Home Buying 101 Why You Must Get A Mortgage Pre Approval

Dated: 03/25/2019

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Image titleThe terms “prequalified” and “preapproved” sound almost exactly the same, however, when it comes to mortgages there are several differences between the two that first-time homebuyers need to understand. Before starting your house hunt it’s great to get prequalified for a mortgage, but with a little extra time and effort, getting preapproved for a loan can put you at an advantage when negotiating the purchase of a new home.

What’s the difference?
Getting a prequalification on your home mortgage is simply a basic step. It’s like a fact-finding mission and doesn’t really signal to sellers that you are a true buyer.

A prequalification from a mortgage lender tells you the types of loans that are available, how much they may be willing to lend to you and what your payments could possibly be. When a buyer gets a preapproved mortgage from a lender, it sends a clear signal to the seller, which is that you are a real contender.

Getting a pre-approval letter means the bank has done its due diligence and they are ready to lend you money. As a buyer, this is great because you no longer have to worry about making an offer contingent on financing.

Another great thing about getting a pre-approved mortgage is that it will lock in your interest rate for a set time period while you house hunt. You know exactly how much you can spend and you know what your monthly mortgage payments will be thanks to your mortgage pre-approval estimate. You are in a much better position to buy the home you want with a mortgage pre-approval letter in your hand.

If getting a pre-approved mortgage is the first step in any successful house hunt, finding an experienced and knowledgeable agent is a close second. If you’re ready to become a homeowner, contact Metrowest today – we’d love to help you start the process.

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