What is Mortgage Pre-Approval? | Smith Mountain Lake Real Estate – Debbie Shelton

What is Mortgage Pre-Approval?

If buying a new home is on your holiday wish list, then adding a mortgage pre-approval is a must. A mortgage pre-approval, also known as a credit approval, is a loan that has been approved by the financial institution (bank, mortgage lender, or credit union, for example.) This means that all of the criteria that is needed for a loan (credit check, income verification, etc.) have been successfully submitted and the applicant has been approved for a specific amount of money.

 

Why is Getting Pre-Approved Important?

Getting a loan approval allows you to know how much home you can afford. It also shows the buyers that you’re serious about making the purchase. Plus, once you find a home that you’d like to place an offer on, you’re already ahead of the game by having that pre-approval.

 

How Do I Get Pre-Approved?

Getting pre-approved for a mortgage loan is easy. First you have to choose a financial institution for your home loan. This can be your bank, a mortgage lender, or a credit union. Once you’ve found a lender that you like, simply speak to a member of their team to get started. You’ll need to provide specific collateral, such as bank statements, proof of residence, and tax returns.

 

What if I Can’t Get Pre-Approved?

Getting turned down for a loan can be disappointing. But instead of throwing your hands up in the air in despair, take the time to work on repairing your credit score. For tips on how to improve your credit, read this.