If you are new to choosing a mortgage then you are probably already aware of the minefield of mortgage options being offered on the market. To add to that, there are many choices that a mortgage borrower can make to decide on the most suitable mortgage for themselves. One such choice is to decide whether you should get a mortgage pre-approval and establish eligibility.
Established eligibility, pre-approved mortgage, what is the difference?
When your mortgage eligibility is established, the lender will simply give a general idea of the amount of funding you might get to buy a house. When you get pre-approved mortgage, the lender has actually committed (subject to certain conditions) to lend you money. The pre-approval should be your first stop when you are seriously looking to buy a house.
Why get a pre-approved mortgage?
Getting a mortgage pre-approval allows you to find and research the house of your dreams easier if you have a mortgage pre-approved, you have many of the following benefits to enjoy:
- You save time because you will only search and view the properties that you can afford;
- you manage your money better, since you know the amount of your monthly payment and your required down payment;
- property agents will generally offer you a better and a more serious service because they know that you are a serious buyer and ready to move to buy a property because you have a pre-approval;
- when you make an offer to purchase a property, the seller is more likely to seriously consider your offer because he/ she knows that your financial situation is well established;
- Your mortgage pre-approval increases your bargaining power with the seller;
- Your mortgage rate will be protected against any increase for 90 days, if you choose a fixed rate term (and your rate will decrease if rates go down);
- you pay no fees and you are not obliged to accept the mortgage that has been offered to you by the lender;
Better still; some lenders will give you an answer within 48 hours of receipt of your application for mortgage pre-approval. You can even make your application online now.
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