Call Simplicity Mortgage for your mortgage pre-approval today!
The busy home buying season is upon us!
Spring is typically when home buying starts to pick up, but today's market never slowed down! Inventory is low and new listings quickly disappear, so being pre-approved and working with an experienced lender is more advantageous than ever. In our local area some properties are getting multiple offers the day the home is listed. How can you make your offer stand out? Is there a way you can beat out a cash offer?
One key thing you can do is have your pre-approval from a trusted lender ready and submit it with your offer. This will help the sellers know you are serious about the purchase, can afford the home and have taken steps to get your financing set up to do so. Having a locally trusted lender who is known for closing deals quickly can also provide the seller confidence that accepting your offer will get them to the closing table with no issues.
If you are interested in buying in the next few months getting preapproved today will help you to quickly put in a strong offer when that hot property you love hits the market!
Your Mortgage: Pre-Qualification vs Pre-Approval
Most every home buyer would agree one of the most important questions when looking at a property is: How much does it cost? This directly correlates to the question of how much a buyer can afford. If financing the property with a home mortgage, the lender gets to weigh in and decided how much they are able to lend the borrower. There are two levels of analysis that can be used to answer this question for each borrower, pre-qualified and pre-approved.
Pre-Qualification for a mortgage is a preliminary method of estimating how much you can borrow from a lender or bank. The borrower provides some details about their finances such as income, savings and investments. The lender will then make an initial assessment of how much they will lend. They analyze the information you provide, but typically do not require any documentation or proof of the information you provide. The pre-qualification will give you a good idea of what you can afford, but in order to make a serious & competitive offer you will need to be pre-approved.
Pre-Approval for a home loan is similar to the pre-qualification, but goes several steps further. It requires documentation proving your income, employment, bank account balances & activity, pension, retirement, etc. This documentation may include W-2's, paystubs, bank account statements, credit, and more. The lender needs to review the documentation to determine your assets, debts and consistent monthly income to accurately assess what you could pay back in a mortgage payment each month. Ultimately the lender is determining your level of risk based on your specific financial scenario. The bank or lender's goal is to ensure that the mortgage will be paid back in full.