Years ago, buyers didn't worry about financing their home purchase until after they found the home they wanted to buy. Once they had an accepted offer, they'd shop around for a week or so and then submit a loan application.
With the recent changes in lending, it is important that you have a complete understanding of how much home you can afford, what out of pocket money is required and what the terms and conditions are for writing an offer on the home you choose.
To be able to complete the transaction, buyers are now getting pre-approved for a mortgage before starting their search for that perfect home. This way, the buyer is seen as viable to the seller, has greater influence in negotiating a purchase price, and can act quickly when they find a home they really love. A pre-approved homebuyer is considered almost as strong as a cash buyer.
There are two parts to mortgage approval: 1) approval of the borrower, and 2) approval of the property. Mortgage pre-approval is a process whereby the borrower is approved for a specific mortgage amount. The approval is usually good for a period of time. A property approval is one with a satisfactory appraisal and a clear title report. Final mortgage approval also requires a purchase agreement that is signed by the buyer and the seller.
If you'd like free advice on getting the very best financing for your home, or how to get pre-approved for a mortgage (or even refinancing or a home equity loan), please call us at (440) 212-5007.