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3 Reasons to Get a Mortgage Pre-Approval 

 

If you’re new to homebuying and the world of home financing, you’ve probably heard that getting pre-approved for your mortgage is an essential step to get started. But why is it so important to get pre-approved as you begin the homeownership process? 

We wanted to go over a few of the reasons why it’s beneficial to get a pre-approval – but before we get into the ‘why’, let’s start with the ‘what’. In its simplest form, what is pre-approval? 

A pre-approval gives you confirmation of the type and amount of mortgage you qualify for based on financial information and documentation provided to the lender. Some of the information your lender will verify may include your income, employment, credit report, and any assets and debts. For pre-approvals, documentation is also needed, including but not limited to: W-2s, current pay stubs, and a summary of your assets. 

Just remember – pre-approval isn’t final approval, or a guarantee of final mortgage approval. Once you find your home, your application will undergo the full mortgage underwriting process. 

So why get a mortgage pre-approval? Here are 3 reasons why getting a pre-approval is a good idea as a homebuyer: 

1) It will alert you to any credit problems.

A pre-approval reviews your finances and includes a credit check, so if there are any errors or issues on your credit report, you have the opportunity to correct these before applying for your mortgage. Once you’ve taken care of any issues, it can still take a few months for your credit score to be fixed. Since your credit score can impact your approval and mortgage loan rate, it’s a good idea to make sure your credit report is accurate before starting your mortgage application.

2) It will let you know your price range as you begin the search for your new home.

Your housing price range and what you can afford monthly will impact and be a significant factor in your home search. Pre-approval will help provide information regarding how much you are able to borrow so you can narrow down your search and find homes in your price range.

3) It strengthens your offer. 

Including a pre-approval with your offer shows the seller that you are serious about buying their home and may give you a competitive edge over other potential buyers – especially in the current real estate market. 

Set yourself up for success as you begin your homebuying journey by making sure you’re pre-approved – or better yet, make your offer as good as an all-cash offer with a Pre-Purchase Commitment from HUNT Mortgage

HUNT Mortgage offers a Pre-Purchase Commitment that delivers a fully underwritten pre-approval commitment, subject only to collateral conditions. HUNT Mortgage backs its commitment with a $1,000 guarantee. If a buyer does not close on a transaction due to the buyer’s mortgage application being denied, we will pay the seller $1,000.*

If you’re ready to make your next move with the mortgage and buying process, or if you have any questions about getting started, contact one of our knowledgeable Mortgage Consultants today!

 

*The guaranty is null and void if:  a) The property is not deemed acceptable collateral for the loan due to value and or condition; b) The buyer or seller willfully cancels the transaction; c) The buyer voluntarily terminates employment and or voluntarily divests assets prior to closing; d) The buyer takes out new credit after the Pre-Purchase Commitment is issued; e) The seller is unable to deliver clear acceptable title;  f) Guaranty is only on owner-occupied single-family transactions; g) The transaction does not close due to a contract contingency not being met other than the mortgage financing;  h) Pre-Purchase Commitment was issued with maximum specific sale price and taxes, guaranty is void if either of these are exceeded; i) The contract closing is dated past the expiration of the Pre-Purchase Commitment. Guaranty is only on Pre-Purchase Commitments issued by HUNT Mortgage. J) Guaranty is null and void if area property is located in becomes designated as a State or Federal disaster area prior to closing k) Any act of God prevents the closing.

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