Do you have any plan to deal with a mortgage company currently? If so, have you known anything about mortgage? Are you ready with the monthly payment with all the income that you have? Yeah, there are so many things that are awaiting ahead you before engaging to a mortgage company. It is better to know all the stuff related to mortgage loan before you deep into it because some are confusing and not easy to understand. One of the matters that you should know earlier is pre-approved mortgage. Do you know the meaning of a pre-approved mortgage?
Pre approved mortgage or mortgage pre approval is usually a written statement from a lender to a borrower that says about the preliminary determination which the borrower should qualify for a certain total amount of loan under the lender guideline. So, it is only the preliminary statement in the written form that explains how much of loan that you are qualified under certain lender guidance. Usually, the amount of the loan that is qualified for you based on your income and credit information. In some cases, most pre approval letters are good for 80 – 90 days.
Then, you may question yourself about how to get a letter of pre approval. Then, you can seek it on the internet because you can find so many local lenders via online. Then, the lenders will consider and assess everything related to the information that you give like your bank account, credit, income and other asset. After all the review made, the lender is usually will make a preliminery written statement saying the best qualification for you with all of the qualification that you have.
In addition, if you wonder whether a pre approval will guarantee a loan or not, below we will discuss it! The answer is simply no. For example, if you are connected to a local lender via internet and you have already gotten a pre approval letter, you are not dealing with any loan with the lender and of course you are not into any term of loan even specific rate. Instead of only a pre approval, a lender usually requires you to add some other documents and information like asset verification as well as any satisfaction of your condition to extend you a loan. Instead, pre approval letter means to be the subject of cancellation or modification if any change occurs in your condition, so it influences your financial situation. In short, a pre approval letter is not the one that guarantee specific term or rate, it is also not the one offering to lend also not the one marking commitment on a loan. In addition, filling the form of the questionaire in the internet is not an act to propose for a credit. The most important thing is that this letter doesn’t guarantee that the home you offer is accepted by a seller because it is just a preliminary review knowing your qualification. Then, why everyone should have dealed with pre approved before engaging to a mortgage? There are several reasons why you have to deal with this pre approval. The most important reason is that your qualification is estimated, so you can understand of how much rate or home cost that you can afford with your income. It is helpful to limit the target house that you are looking for to only shoot the one in the range of your capable rate. In addition, a pre approval letter is also beneficial to show to real estate agents or sellers that you are capable to pay the price of the house that you are going to buy. Although it doesn’t guarantee you that the sellers will accept you as te buyer, but a pre approval letter is helpful as they usually will ask you to submit it for preliminary review. In other words, a pre approval letter will make you stand out in real estate market, especially if the letter says you are in good qualification with good credit review and high income. It can be said that a person with a pre approval letter is stronger in the market compared to the one without it, and some sellers will respond to your offer seriously with a pre approval letter.