What Is A Mortgage Pre Approval?
Watch out! As you wade into the ocean up to your waist you all of a sudden notice the red flag flying up the beach and feel the water sucking at your legs. It’s time to reassess today’s swim. The same can be said about buying a home without fully understanding the Mortgage Pre Approval. Let’s get you to home ownership safely.
Easy Mortgage Pre Approval Definition
I want to give you a definition that is easy to understand. Something you can explain to your son or daughter and they won’t look at you like you are from Mars or Venus.
A Mortgage Pre Approval is a process where a lender assesses your ability to qualify for a mortgage amount based on your income and credit information.
A Pre Approval helps you determine if there is a strong possibility that you will be approved for a mortgage once you make an offer on a home.
Find out more about all the things you need to know about your Mortgage Pre Approval.
Mortgage Pre Approval Meanings
The banks have made the mortgage process much more confusing than it needs to be. By removing the human factor they have broken things down into more parts and they are not the same. Here is a simple way to cut through their mountain of jargon.
I liken these parts to the red, yellow, and green flags flown at the ocean when you are checking how safe it is to venture out to swim.
Mortgage Pre Qualification – Typically there isn’t a human even looking at this process. An algorithm has spit out a number based on general mortgage guidelines. This is a red flag in how sure you can feel about taking an online app’s feedback and purchase a home with it. Watch out!
System Generated Mortgage Pre Approval – Again, often this is completed totally online without a professional’s review. The difference here is your full credit information has been incorporated into the process. This Mortgage Pre Approval often specifies a term, interest rate, and the your limit of what you can borrow. This is a yellow flag as you may not qualify for the amount on the piece of paper once the mortgage undergoes a full review. Proceed with caution!
Mortgage Pre Approval Full Review – The bank does not provide this service. By looking at your full mortgage application, I provide you with the most thorough Mortgage Pre Approval. This includes your specific requirements for housing type, full income review, and vetting your credit report with a fine tooth comb. This information is overlaid against all the major mortgage lender’s most up to date lending policies to provide you with the confidence to make an offer on your dream home. Green flag!
Understanding Your Pre Approval
I think you would agree that purchasing a home is a stressful. Remaining unsure of how to move forward based on an unreliable online quote only adds to the stress. I help all of my clients get their full review quickly and move you to calling your Realtor with the green flag and a let’s go!
By understanding what a full review Mortgage Pre Approval is (and it’s dangerous cousins) you will know how to confidently proceed. Now before you forget…etch this in your memory by teaching junior. Or better yet, call me today and let’s get your full review started.