Getting pre-approved for a mortgage is an important final step when house hunting. This shows the sellers that you’re a serious and capable buyer. Here are three other things to know about pre-approved mortgages.
They’re No Guarantee
Getting pre-approved for a mortgage is not the same thing as getting a mortgage. A pre-approval means that the bank or credit union has checked your credit and every aspect of your finances and you’re seemingly capable of taking on the loan. If something major changes between the time you get a pre-approval and the time you actually apply for the mortgage, you might get denied. If nothing changes, you’re pretty much going to be approved. This is why you might want to make getting pre-approved one of the last steps you take before you begin house hunting.
It Makes Life Easier
When you get pre-approved for a mortgage, you’ll get an idea about how much home you can afford. This makes your house search a lot easier. You can weed out homes that are out of your price range. Just remember: Just because you got approved for a specific amount doesn’t mean you have to get a house at the top of the price range.
It Could Seal the Deal
As USA Today notes, there aren’t a lot of houses on the market right now. If you are preapproved for a mortgage, it could give you the edge when it comes to securing a home. As we said, pre-approval shows a buyer that your finances have already been vetted and you’re as close as possible to locking down a mortgage. If it’s between you — with your pre-approval — and another potential buyer without a pre-approval, chances are the buyer will take your offer.