The Benefits of a Mortgage Pre-Approval
When you're about to commit to spending tens of thousands of dollars — maybe even hundreds of thousands of dollars — for the next 15 to 30 years, you want as much on your side as possible. When it comes to buying a house and agreeing to a mortgage, a pre-approval from a lender for a mortgage will be on your side through several steps of the homebuying process. According to the Home Buying Institute (HBI), a mortgage pre-approval will help you identify obstacles before you start the house hunting process.
That's not all. Here are four benefits of a mortgage pre-approval:
Help Determine Price Range
Knowing how much home you can afford helps you focus on the houses that fit in your budget, saving you time during your house hunt. A lender will review your application and let you know how much they are willing to loan based on your verified income and assets.
Be a Strong Buyer
With a mortgage pre-approval, sellers know your offer is valid because your financing won't fall through. If there are other offers for the house, your offer might be more competitive because the seller has confidence the process is less likely to get derailed because you can't secure financing.
A pre-approval offers you more flexibility on terms and pricing versus buyers who have not been pre-approved. Even if a buyer is competing with all-cash offers, a pre-approval shows that your finances are in order and you can afford the property.
Fast Track to Closing
Since much of your financial information is already in the lender's system, this typically speeds up the closing process. Popular financial advice personalities make this one of their top reasons why you should want a mortgage pre-approval.
This article is intended to provide general information and should not be considered financial advice. Please consult a financial professional before taking any action and to determine how the information provided in this article may apply to your situation.
Loans subject to credit approval. Rates and terms subject to change without notice. Mortgage loans are available only on property in Texas. RBFCU NMLS# 583215. FHA/VA loans offered through RB Mortgage LLC dba Domain Mortgage (NMLS# 862516). RB Mortgage LLC dba Domain Mortgage is principally owned by RBFCU Services LLC. RBFCU Services LLC is affiliated with Randolph-Brooks Federal Credit Union.