In the past home buyers never paid to much attention to getting mortgages pre approval when they were looking to buy a new house. Normally they would find a house, get an accepted offer then shop for the best mortgage deal they could find. Not the other way around.
The Process To Buy a New House Today Is Much Different
Today purchasing a home is a much more competitive endeavor and houses go fast. In most cases Realtors and mortgage brokers recommend that potential buyers get a mortgages pre approval letter from their mortgage lender of choice before they start to shop.
With a pre approval the potential buyer is looked at as serious about the purchase and also proven financially able to buy a new house that is for sale. This will give you and your Realtor more negotiating power with the property seller and their listing real estate agent.
Whats Involved In a Mortgages Pre Approval Process
There are two parts to the actual mortgage pre approval. This involves pre approving the borrower and pre approving the house they want to purchase.
Pre approving the borrower is when the bank or mortgage lender verifies that the borrowers credit and finances are adequate and are enough to qualify them for the loan program they need.
The property pre approval is when the value of the property is verified through a licensed property appraisal. The second part to the property pre approval involves getting a clear title report from a title company.
A clear title shows there are no judgments or liens against the property that need to be paid before a sake can occur.
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