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A mortgage pre-approval is not to be confused with a pre-qualification. Although they sound similar, a pre-approval letter offers benefits for homebuyers that are significant advantages when it comes to your winning home offer.
A mortgage pre-approval is written proof from a mortgage lender that you have the means to qualify and pay back the mortgage you applied for. Unlike a pre-qualification, a pre-approval letter is verified based on a thorough financial review.
A mortgage lender will perform a hard credit pull and review your credit history, credit scores, your income, and any other assets you may have. You will provide bank statements, tax returns, and pay stubs that validate your means of obtaining a mortgage.
A mortgage pre-approval grants you financial clarity, a competitive edge, and the assurance that you can house hunt confidently. It has the potential to streamline your mortgage process, give you a leg up above competitive purchases, and spare you from frustrations.
A pre-approval letter will lay out exactly how much house you can afford, what programs you qualify for, and even your potential interest rate. This provides more solid information than just using an affordability calculator before house hunting. Now, you and your Real Estate Agent can look realistically at the homes in your area that you can confidently afford.
Additionally, a pre-approval can bring application discrepancies to the forefront of your attention. As a pre-approval isn’t a mortgage guarantee, you can take care of any financial or credit errors that may halt or hinder your process later.
According to the National Association of Realtors data, the national housing inventory is 13.6% lower than last year, in 2022. With so few homes on the market but plenty of buyers, bidding wars and tight competition for available properties are common once again.
With a pre-approval letter in hand, a seller is more likely to accept your offer when compared to those without. They know the odds of their home sale falling through are far lower because they have lender verification that a person will be able to make their payments.
With a pre-approval from Homestead Funding, you know you’re setting yourself up for homeownership success! The HomeXpress pre-approval program can be combined with a variety of our programs to ensure you’re getting the best deal possible. With a HomeXpress pre-approval, you can cut as many as 10 days off your mortgage process and get Cleared to Close faster than buyers without.
Ready to learn more? Contact us today to learn how pre-approval can help you move into your dream home!
Homestead Funding offers exceptional customer service and a convenient mortgage process. Whatever your financing needs, our goal is to exceed your expectations.