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Advantages To Getting Preapproved For A Mortgage Loan

By David White

When it comes to shopping for a new property, one of the most significant steps in the process is to get preapproved for a mortgage loan. Since the home loan industry is constantly changing loan guidelines, it is difficult to know if you are approved for a mortgage without submitting an application. By getting prequalified for a home loan first, you are taking the guess work out of the equation.

Many Real Estate Agents want to know that their clients are qualified for a mortgage loan before starting the house searching process. Some Realtors go as far as not working with anyone who is not preapproved first. It is important for the future homeowner to know that getting preapproved first is the most significant step in the home purchasing process.

Why get preapproved now? For starters, completing a mortgage application will let you know where you stand now. If there is a credit issue, you still have time to correct the issue. A preapproval will also let you know what down payment is needed, what your monthly mortgage payment will be and the maximum sales price of a house you qualify for. These are important things to know when searching for a home.

Credit Issues

Most customers do not know what items are on their credit report until it is too late. By submitting a mortgage loan application first, if there is any negative or incorrect information on your credit report, you will have time to repair the issue. Many credit repair companies take up to 45 days to correct inaccurate information. It can take up to 3 to 6 months to get all three bureaus to update with the revised information, so by starting the prequalification process first, if there is a mistake, you will have time to address the problem.

Know Your Down Payment Requirement

A preapproval will let you know the required down payment to purchase a house. Since there are several different loan programs from FHA home loans to conventional home loans with each requiring a different amount for a down payment, it is crucial to know how much money you will need for the home closing. This will also give you time to prepare for the closing by saving money for the down payment.

Know Your Monthly Home Loan Payment

Preapprovals also give you an idea of what your monthly home loan payment will be. This will help you set up a budget and prepare for the home payment. Also, a home loan consultant can help you with mortgage options that can affect the monthly payment.

Know What Your Can Purchase

The most significant part of the prequalification is knowing how much you can purchase a house for. You need to know what the maximum sales price of a house you qualify for. This way, you only are looking for houses that meet your budget.

Let The Seller Know You Are Serious

By getting preapproved for a loan upfront, you are letting the seller know you are a serious buyer. If there are two offers to buy a property and one offer has a preapproval letter, the seller is most likely going to accept the offer with the preapproval letter. By being a prequalified buyer, you set yourself apart from those that wait until the final moments to get approved for a mortgage.

By talking with a mortgage advisor and getting preapproved today, you will have a better understanding of where you stand in your home purchasing process.

David White is a Senior Mortgage Officer who helps clients with purchase home loans. David has over twelve years experience with mortgage loans and understands the loan industry.

categories: fha loans,conventional mortgages,home purchase,preapproval,prequalification,mortgages,loans,real estate,mortgage

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Article Citation
MLA Style Citation:
White, David "Advantages To Getting Preapproved For A Mortgage Loan." Advantages To Getting Preapproved For A Mortgage Loan. 26 Aug. 2010. uberarticles.com. 4 Oct 2014 <http://uberarticles.com/finance/mortgages/advantages-to-getting-preapproved-for-a-mortgage-loan/>.

APA Style Citation:
White, D (2010, August 26). Advantages To Getting Preapproved For A Mortgage Loan. Retrieved October 4, 2014, from http://uberarticles.com/finance/mortgages/advantages-to-getting-preapproved-for-a-mortgage-loan/

Chicago Style Citation:
White, David "Advantages To Getting Preapproved For A Mortgage Loan" uberarticles.com. http://uberarticles.com/finance/mortgages/advantages-to-getting-preapproved-for-a-mortgage-loan/


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