When it comes to making a major purchase, like a house, figuring out the details beforehand is definitely in your best interest. Getting pre-approved for a mortgage before you even start house hunting is definitely recommended. Why? And what exactly does it mean to be pre-approved? Read on to find out.
What’s a Mortgage Pre-Approval?
The pre-approval process is the first phase of qualifying for a home mortgage. Basically, when you’re pre-approved, a lender has said that they will allow you to borrow up to a specific amount of money. To get pre-approved, you’ll need to provide your lender with the necessary information, including your credit score, your income, your employment history, your credit report, and so forth. After the lender assess your information, they will determine whether or not you are eligible for a mortgage.
Why Get Pre-Approved?
A pre-approval on a mortgage illustrates how much money a lender will allow you to borrow. Therefore, by being pre-approved, you’ll know how much you can afford to spend on a house, which will make the entire process of searching a lot easier. Plus, when you do find that dream home, you’ll be one step closer to securing the financing you need to call it your own.