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Home Buying Tips: Get Preapproved For A Mortgage
Home loan or mortgage preapproval is becoming increasingly imperative. Many property developers, realtors, real estate agents and individual property owners or sellers are stressing on mortgage preapproval. Even lenders, including some of the largest mortgage providers, are recommending prequalification and preapproval now.
Preapproval makes the lending process or applying and getting approved for a mortgage or home loan substantially faster and more convenient for all parties. Some realtors and home sellers would only work with clients that have been preapproved for a home loan.
The mortgage industry has typically four phases of lending – qualification or pre qualification, pre approval, approval and lock. Qualification or pre qualification and pre approval are not commitments from any lender. These are mere analyses of a client’s financial profile and an idea of his or her eligibility for mortgage. It helps in setting the stage for a mortgage but in no way is a guarantee that the borrower would be getting exactly what the prequalification or preapproval had stated.
Mortgage preapproval works pretty much the same way as an actual home loan application would be reviewed and processed. You would disclose your income, assets and debts that may be unpaid at the time. These details are used by a lender to carry out the prequalification which will help to ascertain the loan amount that the borrower may be eligible for. The process would also involve checking the credit score.
Mortgage preapproval can almost assure a borrower that he or she would get the home loan when needed. The sellers know that the prospective home buyer will be able to purchase the property if he or she likes it and the ask price is agreed or negotiated upon. A home buyer would be surer that he or she can afford certain homes and would thus search for listings that fall within the budget. The certainty helps in zeroing in on properties that one would be able to buy.
Mortgage preapproval has another distinct advantage. Should there be any lapses in the financial profile, any shortcoming or if the credit score doesn’t impress the lender, then the homebuyer can take adequate measures to overcome those challenges. One may take steps to repair the credit history. One can be free of impending debt to become eligible for higher loan amounts. One may plan some investments which will further enrich the financial profile.
Mortgage preapproval is more of a quintessential requisite now.