Posted by John Jennings on Friday, July 7, 2023 at 10:30 AM By John Jennings / July 7, 2023 Comment
When you're in the market to buy a home, one of the most important steps is getting pre-approved for a mortgage loan. Pre-approval is the lender's way of saying that you qualify for a certain amount of mortgage based on your credit score, income, and other financial factors. While most homebuyers are familiar with the concept of pre-approval, there are some surprising things that you may not know about these loans. In this article, we'll highlight four surprising things you didn't know about pre-approval loans.
Pre-approval letters have an expiration date
If you have received a pre-approval letter from a lender, you should note that it has an expiration date. Typically, pre-approval letters are valid for 60 to 90 days, after which they expire. This means that if you don't find a home within that time frame, you may have to apply for pre-approval again. Remember to check the expiration date on your pre-approval letter and make sure that you don't miss the deadline.
Pre-approval doesn't guarantee a mortgage
Pre-approval is not a mortgage loan, and it doesn't guarantee that you will get a mortgage loan. Pre-approval is just the first step in the mortgage application process, and lenders will still need to verify your employment, credit score, and other financial information before they can approve your loan. So, while pre-approval is a good indication that you are a potentially eligible borrower, it's not a guarantee that you will get the loan.
Pre-approval can help you save money
One surprising benefit of pre-approval is that it can help you save money. When you have a pre-approval letter, you will have a better idea of how much money you can afford to borrow, and you can use this information to shop for homes within your budget. This can help you avoid the mistake of falling in love with a home that is outside of your price range, which can save you money in the long run.
Pre-approval can speed up the homebuying process
Another surprising benefit of pre-approval is that it can help you speed up the homebuying process. When you are pre-approved for a mortgage loan, you will have a head start on the home buying process because you will know how much money you can borrow and what types of homes you can afford. This can give you a competitive edge when you're shopping for homes, and it can help you move more quickly through the closing process once you find a home you want to buy.
Getting pre-approved for a mortgage loan is an important step in the home buying process, but there are some surprising things that you may not know about these loans. Pre-approval letters have an expiration date, pre-approval doesn't guarantee a mortgage, pre-approval can help you save money, and pre-approval can speed up the homebuying process. By understanding these surprising facts, you can make informed decisions about pre-approval and use this valuable tool to help you find the home of your dreams.
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