{"id":552,"date":"2016-12-08T20:40:17","date_gmt":"2016-12-08T20:40:17","guid":{"rendered":"http:\/\/www.mikeclover.com\/blog\/?p=552"},"modified":"2016-12-08T20:40:17","modified_gmt":"2016-12-08T20:40:17","slug":"yes-a-mortgage-pre-approval-is-necessary-heres-why","status":"publish","type":"post","link":"https:\/\/www.mikeclover.com\/blog\/2016\/12\/08\/yes-a-mortgage-pre-approval-is-necessary-heres-why\/","title":{"rendered":"Yes, a mortgage pre-approval is necessary. Here\u2019s why\u2026"},"content":{"rendered":"

\"Happy<\/a><\/p>\n

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Your real estate agent has no doubt told you \u2013 Before you begin to search for a home, you need to get pre-approved for your home mortgage.<\/p>\n

You might think that\u2019s putting the cart before the horse, since you don\u2019t yet have a home in mind to purchase, but it\u2019s one of the most important things you can do if you\u2019re serious about owning a home.<\/p>\n

Note that I said \u201cpre-approval,\u201d not \u201cpre-qualification.\u201d The difference between them is like night and day, because a pre-qualification is nothing more than a ball-park estimate of the price you can afford.<\/p>\n

To obtain a pre-qualification, you do nothing more than talk with a lender about your income, your assets, your debts, and your credit. The lender doesn\u2019t verify any of this, but gives you an estimate based only on what you\u2019ve volunteered.<\/p>\n

The value of a pre-approval:<\/strong><\/p>\n

First,<\/strong> once you\u2019ve become pre-approved, you\u2019ll know exactly how much the bank will lend you for your new home. You\u2019ll know how much down payment you\u2019ll need and your approximate monthly payment should you purchase at the top of your spending limit. You\u2019ll also know if you need to confine your search to homes that will qualify for a specific type of financing.<\/p>\n

This step is important because it will save you from looking at homes you simply cannot purchase. You\u2019ll save your agent time and save yourself the heartache of falling in love with a home you can\u2019t have.<\/p>\n

Second,<\/strong> when you have a pre-approval letter in hand, you give home sellers confidence that you have the ability to purchase their home, as well as the desire. In markets where there is a good deal of competition for each home, most sellers won\u2019t even consider accepting an offer from a buyer who isn\u2019t pre-approved. Why should they take their homes off the market just to wait and see?<\/p>\n

So exactly what is a pre-approval and how do you get one? <\/strong><\/p>\n

A pre-approval is just like the approval to purchase a specific home, but without the home. To get one, you supply the same information that you would supply when making a loan application. For most home buyers, this includes:<\/p>\n