Monday, December 8, 2014

What is Morgtgage Pre Approval?

Lenders offer borrowers either a pre-qualification letter or a pre-approval letter, but the best recommendation is that you get a pre-approval letter before you start home shopping.

A pre-qualification letter states the amount a lender thinks you’ll be able to borrow based on your income and credit profile without any actual documentation.
However, mortgage lending standards have tightened since the housing crisis, and all mortgage loans now require full documentation and verification of income and assets—so most sellers will only accept an offer from a buyer with a full pre-approval letter based on verified information.

Your home hunt will benefit with a pre-approval for several reasons:
◾First, you’ll have completed the credit check and paperwork requirements for a mortgage, so you’ll know your ability to finalize a home purchase. If the lender finds a problem with your credit or an error on your credit report, you’ll have time to fix it before making an offer.
◾Second, since your documentation will already be in place, a mortgage pre-approval will likely speed up the process once you make an offer.
◾Mortgage pre approval puts a buyer in a stronger negotiating position when you are ready to submit an offer on a suitable property.

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