You should absolutely get pre-approved for a mortgage BEFORE you start house hunting so you know exactly what you can and cannot afford. But there are a lot more benefits to getting pre-approved for a mortgage than just understanding what your budget is. Here are just a few:
- Having a better understanding of your price range: this will save you time that would have been wasted looking at homes outside of your range. Now you can shop for houses with confidence within your budget that you know you can comfortably finance.
- Rest easy: buying homes can be daunting for many, especially first time home buyers. Knowing that you have satisfied the initial requirement is comforting!
- Become attractive to a seller: designating yourself as a qualified buyer will encourage sellers to have confidence in your offer (this might even result in a lower purchase price).
- Lock in your initial interest rate for up to 120 days: protect yourself against rate increase. Often, the interest rate is increased between the time that you make an offer and before you close on the purchase. Getting pre-approved in this situation could save you thousands of dollars in interest.
As you can see there are so many reasons why pre-approval is beneficial. So, what’s next? A mortgage expert, like myself, can help walk you through the process of getting pre-approved. It’s not difficult, but some guidance helps with compiling the documentation and considering your options.