The Importance of Getting Pre-Approved for a Mortgage
Tips and Advice
Are you considering purchasing a home with a mortgage? The first step is getting pre-approved, and understanding the process can ease some of the anxiety that comes with home buying.
What is Pre-Approval?
- Pre-approval is a written commitment from a lender that a borrower qualifies for a specific loan amount based on income and credit information. This process is important because it gives you an accurate idea of what you can afford, ensuring that you only look at houses in your price range. Plus, a pre-approval letter is essential in a competitive real estate market where other buyers may have already secured pre-approval.
- Most pre-approval letters are valid for 60 to 90 days.
How Do I get pre-approved?
- To get pre-approved, you’ll need to contact a lender.
- The process typically takes 24 to 48 hours, and with our lenders, it’s free!
WHAT If you can’t get pre-approved?
There are ways to improve your chances,such as:
- Correcting errors on your credit report, potential lenders will look at your credit score and analyze your credit report for red flags such as; late or missed payments, or charged off debt. Your credit score affects your ability to qualify for a loan, and determines what kind of rate you can get. Generally, a score above 680 will get you the most favorable mortgage rates.
- Decreasing your overall debt, In general, a debt-to-income ratio of 36 percent or less is preferable and 43 percent is the maximum ratio allowed. use the debt-to-income calculator to determine your ratio.
- Improving your debt-to-income ratio.
Join our Facebook @DownPaymentHomeownersAssistance to learn more about the home buying process and how you can get pre-approved for a mortgage.
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