What’s the first step is buying a new home? It’s not picking a neighborhood or going to open houses. The very first thing you should do organize your financing. Knowing how much house you can truly afford should be your first priority.
The Benefits of Preapproval
Wyndham Capital Mortgage wants you to know getting preapproved for a mortgage is a great way to know what your price range should be. This knowledge helps keep your budget on track when you start house hunting. Going through the mortgage preapproval process gives you a chance to discuss the different options with your lender and learn what you can do to improve your terms. Being a preapproved buyer gives you leverage when you are ready to make an offer. It shows that you are serious and prepared to close the deal.
What is preapproval?
The process for preapproval requires the borrower to complete all the steps of a mortgage application. You have to provide all the documentation required for getting a loan and you may have to pay an application fee as well. However, you are not obligated to the lender for a loan if you get preapproved.
Prequalified vs. Preapproved
These two terms are not interchangeable when it comes to mortgages and both steps are essential. Getting prequalified is the first stage of the mortgage process. It is based on information that you provide but these details are not verified by the lender. The numbers can change once the lender checks your numbers. This step gives you a better idea of what you can afford but it comes with no guarantees from the lender.
Getting preapproved is a more extensive process. When you have been preapproved for a mortgage, you can move more quickly to a closing. You application is nearly complete when you are preapproved. The lender will have already run a background check and gotten your credit reports and ratings. You merely have to fill in the details of the property you are buying. You might even be able to lock in a rate when you are preapproved.
If you are ready for home ownership, check out the next steps in the process!