What You Need To Know About Pre-Approval in 2023

"In a pre-approval, the lender tells you which types of loans you may be eligible to take out, how much you may be approved to borrow, and what your rate could be."

Verify your mortgage eligibility (Nov 21st, 2024)

How does it work? As part of the pre-approval process, a lender will look at your finances to determine what they'd be willing to loan you. From there, your lender will give you a pre-approval letter to help you understand how much money you can borrow. That can make it easier when you set out to search for homes because you'll know your overall numbers. And with higher mortgage rates impacting affordability for many buyers today, a solid understanding of your numbers is even more important.

Pre-Approval Helps Show You're a Serious Buyer

An added benefit of pre-approval is that it can help a seller feel more confident in your offer because it shows you're serious about buying their house. A recent article from Forbes notes:

"From the seller's perspective, a pre-approval letter from a reputable local lender often can make the difference between accepting and rejecting an offer."

Verify your mortgage eligibility (Nov 21st, 2024)

This goes to show, that even though you may not face the intense bidding wars you saw if you tried to buy during the pandemic, pre-approval is still an important part of making a credible offer. In fact, Christy Bieber, Personal Finance Writer at The Motley Fool explains pre-approval may be the most important part of making an offer:

"Pre-approval maximizes the chances you'll be able to actually close the deal - and sellers want to see that.

The fact that a pre-approval gives you a better chance of getting your offer accepted is undoubtedly the most important reason to complete this step . . ."

Bottom Line

Getting pre-approved is a crucial first step toward buying a home. It lets you know what you can borrow and shows sellers you're serious about purchasing their home. When you connect with a trusted mortgage company like The Byron Mortgage Team we can get you pre-approved for a mortgage so you will have the tools you need to buy a home in today's market. Feel free to contact us at any time with any questions you have about the pre-approval process.