Whether buying or selling a home, the real estate transaction process can be seriously stressful. Hey, no pain, no gain. Getting pre-approved for a mortgage can seriously reduce stress levels.
Many people make the mistake of going house hunting without knowing exactly how a large a mortgage they can obtain. This leads to incredible frustration when a dream home is found, but you can’t get a loan. For some shoppers, the frustration and stress leads them to throw their arms in the air and give up on the process. While an understandable reaction, the stress and frustration can be greatly reduced by getting pre-approved for a mortgage loan.
Getting pre-approved by a lender involves going through the full mortgage application process. You are going to fill out all the forms, provide tax returns or salary verification, have your credit run and so on. The lender will do a full analysis regarding whether you are mortgage worthy. It will also lay out the specific requirements it expects you to meet including the down payment amount and the specifications your potential home must meet. To this end, the pre-approval process is always contingent on the appraised price of the prospective home and any defects found in the home inspection.
Once a lender approves you for a loan, a magical thing happens. The lender will issue a pre-approval letter. The lender letter indicates the bank has approved you for a loan, the specific amount of the loan and often how long the pre-approval will last.
The pre-approval letter is the golden egg in the home purchasing process. It gives you a significant advantage over other people bidding on the same home. Imagine you are a seller who receives to bids within a few thousand dollars of each other. One bid has a pre-approval letter from the lender and the other does not. Which are you going to choose?
The pre-approval usually includes a rate-hold, for anywhere from 60 to 120 days. This locks-in your rate for months, possibly while rates are on the upswing. Even better, if rates should go down, you get the lower rate! This is a beautiful thing.... if rates go up, yours does not. If rates go down, yours does.
Getting pre-approved also has additional benefits. As you go through the process, the lender may alert you to problems. You can then go ahead and take the necessary steps to fix the loans. It is better to know about any problems before you have an offer on a property. Compare this to trying to get a loan while in escrow. You are under a lot of pressure to get the loan in a thirty or sixty day period. If you fail to get the loan, you lose your good faith deposit, which is often thousands of dollars. Obviously, that is a disaster.
Whenever possible, get pre-approved for a mortgage before shopping for a home. It will save untold amounts of stress and make the buying process much easier.
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Rebecca joins the team with over 20 years of business, investment and real estate experience. A true advocate for the consumer, Rebecca brings you unparalleled integrity with unbiased advice. Phone anytime and discover for yourself just how easy and enjoyable the mortgage process can be.
Serving Metro Vancouver Area
& Tri-Cities BC
Direct 604.614.2382
Fax 604.463.7886
rebeccaawram@homenwork.com
www.communitylendingcentre.com
Head Office:
#200 - 5050 Kingsway
Burnaby, B.C.
V5H 4C2
