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Carol McDonald
RE/MAX Homeward Bound
(800)632-4762
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Pre-Approval: The Key to Moving Quickly
One of the most important steps in the home buying process is
receiving pre-approval for a home loan. Many buyers actually
apply for a loan and receive approval from a lender BEFORE
searching for a home. This is called pre-approval.
Why is pre-approval important at the beginning of the home
buying process?
* Pre-approval can cut days or even weeks off the closing
process, since the lender has already conducted his credit
analysis and approved you for a mortgage.
* Pre-approval strengthens your offer and negotiating position.
A home seller will often choose an offer that is pre-approved
for a mortgage vs. someone whose financial picture is still in
question.
* Pre-approval will determine your price range and narrow your
search parameters. Based on your down payment and that
pre-approved mortgage amount, you will know how much you can
afford before you start looking for a house.
There is also a significant difference between buyers who are
pre-qualified and those who are pre-approved.
A buyer who is pre-qualified is one whose lender has determined
how much he/she can borrow based only on information the buyer
has provided to the lender. Nothing, however, has been verified
to determine the buyer's true creditworthiness. The buyer must
fill out a loan application and go through the lender's approval
process at a later date.
When a buyer has been pre-approved, the lender has already done
a credit check along with verification of employment and
deposit. The lender's pre-approval is a commitment to loan the
buyer up to a certain pre-determined amount. The only thing
missing is the lender's appraisal of the home to confirm its
value.
Contact me when you are ready to purchase your next home. Also,
let me know if I can provide any additional information about
your own pre-approval or financing alternatives.
Sincerely,
Carol McDonald, CRS, SRES
RE/MAX Homeward Bound
(800) 632-4762
e-mail: carol@cmchomes.com |
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