What Is a Mortgage Pre-Approval and Why Is It Important?

Being intentional and competitive are musts when buying a home this season. That’s why having a mortgage pre-approval is so important. It allows buyers to enter the market with focus, clarity and realistic expectations. Getting a mortgage pre-approval from the Ultimate Lending Team is a fully customizable process that gives buyers a competitive edge.

A mortgage pre-approval is a way to verify your creditworthiness without having a purchase contract in hand. Peter Warden, Editor of The Mortgage Reports, explains: “The lender will check out your personal finances and issue you a letter confirming the amount you’re eligible to borrow. This not only gives you a firm budget for house hunting, but also lets sellers know you’re qualified to make an offer.”

Why Is It So Important?

Why does that matter so much today? There are many more buyers looking for homes today than there are homes available for sale, and that’s creating some serious competition. The average home is getting 4.8 offers per sale.

As Warden puts it: “There’s another important reason to get preapproved, too. And that’s because there are way more buyers than homes in today’s market, which means you need to be ultra-prepared if you want to win. Most sellers are getting multiple offers right now. And most won’t even entertain an offer without a preapproval letter included.”

Your pre-approval gives you a leg up in these situations – it lets a seller know you’re qualified to buy. Because you know exactly what you can borrow before you write your offer. This helps both you and the seller feel confident in what you’re bringing to the table. And that puts you in a better position to win your dream home.

Every advantage you can gain as a buyer is crucial in a market that’s constantly changing. Mortgage rates are rising, home prices are going up, and lending institutions are regularly updating their standards. You’re going to need guidance to navigate these waters, so it’s important to have a team of professionals on your side. At the Ultimate Lending Team, we’ll help make sure you’re ready to put your best foot forward.

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