What is a mortgage pre-approval?
A pre-approval is not a guarantee that you will receive the loan. It is, however, a step toward final approval and gives you a reliable idea of how much you can borrow. This makes it a very helpful tool when you are shopping for a home or other property.
To get a pre-approval, you’ll need to provide the lender with information about your income, assets, debts, and credit history. Most of the time, this information comes through an application. The lender then reviews the application and determines your eligibility to borrow up to a certain amount.
A pre-approval is a useful tool for several reasons. First, it helps you set a budget when you are shopping for a home or other property.Second, sellers will prefer a pre-approved buyer over one not yet pre-approved. So, a pre-approval gives you a leg up on competing homebuyers who don’t have a pre-approval. Finally, a pre-approval helps you move more quickly through the mortgage process once you have found a property you want to purchase. Your application is already with a Loan Consultant who has already begun underwriting your file.
What documents do I need for a pre-approval?
The application goes over basic things like:
- Income: Be ready with your annual gross income.
- Assets: We’ll ask you about your bank accounts, investments and other properties to start. If you do not need these to qualify, you may be able to skip these at this point.
- Employment: You need to be currently employed and able to show your employment over the past two years. If you have a gap in employment, you may still qualify for pre-approval.
- Credit/Debts: We will ask you for your social security number and permission to run a credit check. This will give us a score as well as a list of your current and past debts.
- Identification: You will need to provide the lender with some form of identification, such as a driver’s license or passport.
Depending on the contents of your application, we may ask for some supporting documentation. If we do not need it up-front, we’ll ask at some point in the process. It is a good idea to be prepared with any documents to support the information shared above.
When would I need a pre-approval?
It also gives you an advantage when you are competing with other buyers for a property. Sellers prefer offers from someone with a pre-approval over someone who hasn’t applied yet.
If you are not in a rush to buy a home or other property, it can still be a good idea to get a pre-approval, even several months in advance.This gives you plenty of time to review your credit report and make any necessary changes to improve your credit score. It also gives you ample time to save up for a down payment and gather any other documents that the lender may need.
If you are in a hurry to buy a property, CapCenter can get you pre-approved quickly. Often within the same day. We’re confident in our product and we encourage you to shop around with other lenders to ensure you’re getting the best deal. If you think you found something better, let us take a look. We may be able to beat it.
Why would I need a pre-approval?
- It helps you set a budget: A pre-approval gives you a better idea of how much you will be able to borrow, which helps you set a budget for your purchase.
- It gives you an advantage when shopping for a property: It’s common for a seller to require a pre-approval before they will consider an offer.
- It expedites the mortgage process: Once you have found a property you want to purchase, your lender has already started collecting the required documents and reviewing your application.
- It saves you time: Having a pre-approval ensures that you are looking for homes in your price range.
A pre-approval is a useful tool when you are shopping for a home or other property, as it can help you set a budget, give you an advantage when competing with other buyers, and expedite the mortgage process.
Do I need a pre-approval to buy a home?
If you are ready to make an offer on a home, you should have a pre-approval in hand. A pre-approval gives the seller confidence that you area serious buyer and that you have the financial means to follow through with the purchase.
It is important to note that a pre-approval is not the same as a mortgage approval. To get a mortgage, you will need to complete the full loan application process and provide the lender with all of the necessary documents. The lender will then review your application and decide whether to approve your mortgage.
Overall, while a pre-approval is not strictly required to buy a home, it is a useful tool in the home buying process. It allows you to search for a home within a set budget. It also lets the seller know that you are a serious buyer when you make an offer.
Can I get a REALTOR® before getting pre-approved?
A REALTOR® can help you find properties that meet your needs and budget, and can assist you with the negotiation and purchase process. It is generally a good idea to get a pre-approval before you start actively shopping for a home or other property. And in many cases, that will be the first step after speaking with a REALTOR®. A pre-approval helps the REALTOR® set a budget, which helps them get you into home you’re interested in quicker.
Overall, it is not necessary to get a pre-approval before working with a realtor, but it is incredibly helpful for both you and the REALTOR®. In fact, it is not uncommon for a REALTOR® to ask you to get a pre-approval before they start getting you into homes.
Is a pre-approval a guarantee of funding?
To get a mortgage or other loan, you will need to complete the full loan application process and provide the lender with the necessary documents. The lender will then review your application and decide whether to approve your loan. Factors that may affect the lender’s decision include your credit history, income, assets, debts, and the property you are planning to purchase.
A pre-approval is not a binding agreement between you and the lender. It does not obligate the lender to give you the money, and it does not obligate you to accept a loan if offered. A pre-approval is simply an indication of your potential borrowing power. It is subject to change based on your financial situation and the lender’s policies.
What's the benefit of using CapCenter for pre-approval?
The benefit of using CapCenter for your pre-approval is that we can put you directly in contact with an in-house REALTOR®. Our loan professionals work directly with our realty professionals. This allows us a seamless transition from applying for a pre-approval to finding your next home!It also lets us offer you a Zero Closing Cost mortgage. So what’s the benefit?You get seamless service and save time and money using CapCenter for your pre-approval.