What is a mortgage pre-approval?

A mortgage pre-approval is a written assurance from a lender or broker that you’re able to borrow money to purchase a home up to a certain amount. You will supply your income, employment, and asset documentation in conjunction with your credit history. So let’s look at the six reasons you should get pre-approved.

1. It carries more weight than a “pre-qualification.”

A pre-approval differs from a pre-qualification. With the former, the lender has checked your credit and verified your documentation to approve a specific loan amount (usually for a particular time such as 30, 60, or 90 days). A pre-qualification can be helpful to estimate how much you can afford to spend on your home, but it’s a less accurate indicator of your purchase ability. A pre-approval always carries more weight.

2. You’ll know how much house you can afford.

Getting pre-approved before you begin house hunting allows you to know how much house you can realistically afford. Knowing this narrows down the options and makes the selection process more efficient. Not to mention, it protects you from the unpleasant surprise of realizing the home you fell in love with doesn’t fit your budget.

3. It adds clout to your offer.

In many markets, such as Northern Colorado, homes attract more than one offer. If the sellers weigh one offer against another, they may lean towards the one accompanied by a pre-approval letter. That’s because pre-approvals instill confidence that the buyer is financially capable of purchasing their home.

4. It could increase your negotiating power.

A pre-approval will provide you with the upper hand when negotiating the price. If the homeowner is eager to sell, they may be more willing to accept a lower offer from someone their confident is financially capable of purchasing their home.

5. It saves time.

Obtaining a mortgage is a lengthy process. Getting pre-approved ahead of time shortens the time between contracts to close — this way, you’re ready to proceed with finalizing the mortgage once you’ve found the home you want to purchase.

6. Without it, most agents won’t work with you.

Think about it: when you hire an agent, they will invest countless hours showing you homes throughout your house hunt. If you were in their shoes, wouldn’t you want assurance that your hard work would lead to a favorable outcome for both you and your client?

In short, you need a pre-approval letter, not a pre-qualify letter. It will put you miles ahead in your home buying journey. Call or text Joy, our Buyer’s Agent, at 970-290-6809 or email her at Joy@ProSellsColorado.com to get your pre-approval letter.

Some local lenders we work with:
Jim Verg – 970-689-8237 Bank of Colorado

Krista Labar – 970-685-7043 Premier Mortgage

Another great option is Keller Mortgage and Keller Covered for insurance. See below. 

To make a CASH OFFER Text “Homeward” to 970-290-6809.