In today’s market, with so many loan programs being offered and the increased amount of homes for sale, you will find being preapproved for your mortgage will save both you and your real estate agent a tremendous amount of time.
A “preapproval” is a commitment from a lender for financing to a specific loan amount that was concluded from a review of your credit and income verification.
Becoming preapproved will allow your real estate agent to find homes that fit into your price range, based on the amount for which you have been preapproved to obtain financing. By doing this, you can eliminate homes from the large available inventory that would simply waste your time.
Keep in mind that a preapproval doesn’t always mean that a home that matches your price range is a guarantee once you have negotiated and signed a Purchase & Sale Agreement. The preapproval is a process to examine just the borrower(s) and although you may qualify to afford the home, the home itself also has to qualify to allow for financing. The home is qualified by having a Satisfactory Title Search done as well as a Satisfactory Appraisal. If the Title Attorney’s exam of previous deed changes and survey changes are acceptable, and a Licensed Appraiser can find value in comparable homes to support the purchase price, you are doing great.
One final item to remember is that a preapproval is generally only good for 120 days. After that time, a new credit report will be required along with updated income verification to allow for the continuance of the preapproval decision. If your original loan application changes in any way, such as, loss of income, or assets, the original preapproval will be voided, and a new decision will be delivered based upon the current information.
The preapproval process is relatively simple, and can usually be completed within 24 hours. Feel free to contact me with any questions about the preapproval process.
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