Once you’ve decided that you are ready to purchase a home, getting pre-approved for a mortgage loan is the first thing you should do. Understanding what a mortgage loan pre-approval is will be a guide in your home buying process.
Pre-Approval Defined
A pre-approval is a preliminary loan approval from a mortgage lender. It is an approval that is issued before the lender has any documentation or subject property information from the borrower.
What to do with a Pre-Approval
After getting your pre-approval from your lender you should do the following things:
- Read over all of the stipulations and conditions of your pre-approval. Be sure you can meet all of the conditions listed.
- Start collecting the required documentation that the mortgage lender requires.
- Present the letter to your realtor and discuss what your desired maximum home sales price.
- Start looking for homes within your price range.
Getting pre-approved allows you to know how much you can afford and will help you to become prepared for the loan process once you’ve entered into a real estate sales contract. Remember that a pre-approval is just preliminary, you must be able to meet all of the conditions of the pre-approval before getting your mortgage loan. Make sure you thoroughly understand your pre-approval and contact your mortgage provider with any questions you may have.