Home Loan Pre-Approval: What Is It & How to Get It | Trusted American Mortgage
*There is no place like home.*—Dorothy
Our team at Trusted American Mortgage completely understands the need and desire to want to go house-hunting as soon as it is decided that you are in the market for a new home.
However, have you ever found something you loved and then realized at the end that you couldn’t afford it? It quickly puts a damper on the entire experience and makes it hard to move forward to find something you love even more.
Therefore, rather than going in blind when house-hunting, know how much home you can afford by getting pre-approved for your mortgage before starting the search for your new home!
Things to Know About Getting Pre-Approved
Finding your dream home should be fun! So, take the risk of being disappointed out of the equation by getting pre-approved before you start hunting.
What is this pre-approval, you might ask? Well, it essentially tells you how much of a loan a bank is willing to provide to you. This will provide you with clear parameters on what you’re able to afford—and what you are not.
The first thing to know, though, is that just because you get approved for a $300,000 home mortgage, it doesn’t mean you need to buy a $300,000 home! It’s very important that you truly understand the costs of homeownership, above and beyond just the monthly mortgage. Make sure to set yourself up for success!
How can you obtain the best possible terms for your loan? It’s all about credit.
First, you want to make sure that your credit score is ready for a home mortgage. The higher the credit score, the better the interest rate on your home loan. Start taking steps to improve your score by making all payments on time, not closing old accounts and paying off your credit accounts monthly when possible.
In addition, you also want to make sure your debt-to-income ratio isn’t too unbalanced. If most of your income is going toward paying off debt, that won’t reflect positively when applying for a mortgage. So, work to pay down some of the debt prior to house-hunting, for best results.
Are you in the market for a new home? Before you start house-hunting, give our team at Trusted American Mortgage a call to discover how much home you can afford.