Getting Pre-Approved for a Mortgage

So, you’re ready to make an offer on your dream house: high ceilings, friendly neighborhood, enormous back yard for the kids. But oh no! Someone else has spotted it, and they’re ready to make an offer, too! What do you do? Well, this is a situation where getting pre-approved for a mortgage could come in very handy.

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You’ve probably heard the term before. In fact, you probably see it coming through the mailbox every day in the form of credit card offers. Congratulations, Mr/Mrs Smith! You’ve been pre-approved for a super-value gold card! Well, this isn’t quite the same deal.

Getting pre-approved for a mortgage means that you have to approach a lender and ask for pre-approval. They’ll check your credit and verify your income, and then they’ll come back to you and tell you that they can pre-approve you up for a loan up to a certain amount. This means that you’re guaranteed to be approved for the loan. Once you’ve been pre-approved the mortgage lender will send you documentation to this effect.

Now this is where pre-approval comes in handy. You’ve found your dream home. You want to make an offer, but another buyer has just walked in and made a similar offer. Well, with pre-approval you’ll have the upper hand. All you have to do is present your pre-approval letter to the seller and make your offer. They’ll know you’re serious, and they’ll be reassured that they won’t have to waste time waiting for you to get a home loan as it’s already been guaranteed.

For sellers who would like to make a quick, painless sale, a buyer with a letter of pre-approval is a huge bonus. You might even be able to haggle the price down a little more on the strength of your pre-approval letter. Hey, it’s worth a try!