As a first time home buyer, you’re entering a new world. You may have been told that you need mortgage pre-approval, but what does that mean? Your mortgage is what helps you afford your future home, but there are many steps to this process, including:
With such similar terms involved, it can be easy to get the different steps of the mortgage process confused, but with the help of an experienced mortgage broker you’ll learn everything you need to know for a full understanding. At Regional Mortgage Group, our brokers can help you through every step of the mortgage process.
Mortgage pre-qualification is the first step in getting a mortgage. It’s when information has been provided by a borrower but is not yet verified. You supply your overall financial picture, but there is no analysis of your credit report. A mortgage professional will analyze the data you supply to determine how much you can afford regarding a home purchase.
Because pre-qualification doesn’t include a full suite of documents to examine or a close look at your credit bureau, your mortgage professional won’t be able to address any potential issues that may occur. For example, in today’s crowded market, you may end up in a bidding war with another buy, which could result in a shorter financing period. You could lose the house of your dreams if an issue with your financing occurs after a real application is taken. How can you avoid this? By getting a real mortgage pre-approval – that’s how!
Mortgage pre-approval is the next step in the process. You’ll complete an official mortgage application and supply the lender with any necessary documentation. In this way, the lender will perform an extensive check on your financial background and current credit rating, allowing the lender to tell you the specific mortgage amount you’re approved for.
With a mortgage pre-approval, you’ll receive a conditional commitment in writing for an exact loan amount. This process allows you to budget for your home purchase and lock in a mortgage rate in case rates change during your home search. Pre-approval doesn’t commit you to a single lender, but it does guarantee that your mortgage rate will be locked in for 120 to 160 days.
As a first time home buyer, you may be especially confused about the process of obtaining a mortgage. Regional Mortgage Group has a team of mortgage professionals who can explain the ins and outs of the process while helping you find the best rate, terms and conditions available. To learn more about mortgage pre-approval, give our team of mortgage professionals a call.