If you have started looking for a new place, you might have heard people talking about mortgage pre-approvals. Sometimes realtors ask you right away if you have been pre-approved and for what amount. In other cases possible mortgage amount comes to mind when you finalize your offer and think about adding a financing condition (though in this case it's more likely to be "I wish I had a pre-approval").
So does the pre-approval even matter? I'm here to tell you that it does matter, for a few main reasons:
a) it tells you how much money you can potentially qualify for and what could be the interest rate. So really, it gives you an estimate for your future mortgage. Combine that number with downpayment you have - and you got your future home budget!
b) it shows sellers that you are serious and helps you feel confident in your buying options;
c) if you have a fully underwritten pre-approval, at that very early stage your mortgage professional can give you valuable advice to make your homebuying journey easier;
d) as a general rule, mortgage pre-approvals are valid for 90-120 days and lenders agree to hold the rate for you. So if rates go up, you will be protected (and if they go down, most lenders will give you the lower one, so win-win).
There are of course other reasons to get a pre-approval, plus everyone's situation is unique. Important thing is to get a pre-approval at the start of your homebuying journey. So reach out to me and let's chat about your pre-approval!
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