Throughout my experience as a Red Deer mortgage broker, I have seen first-hand the benefits provided to a borrower by acquiring a pre-approval.
The process of getting pre-approved involves completing an official mortgage application and while it is much more in-depth than the process of getting pre-qualified it is well worth the time! A pre-approval can benefit you as a borrower in many ways, from accurately planning your budget and increasing your bargaining power, to opening your eyes to additional fees and saving you time in the long run.
Accurate Budget Planning
Perhaps the largest benefit of obtaining a pre-approval is that you will be able to accurately plan your budget. With a pre-approval, you will know exactly what price range you should be searching for your home in, which can help to quickly narrow down your search.
If you are going with a fixed rate mortgage, you will also know what to expect for your monthly payments and can accurately plan your budget around that figure.
Increase Bargaining Power
If you want sellers to take your offer seriously, it is important to get a pre-approval before you make your initial offer. This will show sellers that you are serious about your offer and that you have the documentation to back it up.
A pre-approval can even help increase your bargaining power, especially if there is competition among buyers for the same property. Sellers don’t want to risk agreeing to an offer made by someone who may not get approved for their loan, even if they are offering more money.
A pre-approval will also show sellers that you are already working with a professional and will be able to act quickly to complete the transaction.
Spot Additional Costs
There may be fees associated with your mortgage that you were unaware of before sitting down to begin the process. This is especially true for most first-time home buyers.
Going through the process of applying for your mortgage will lay everything out for you and give you the opportunity to discuss anything you are unsure of with your mortgage broker who can help you prepare for any unexpected costs.
As long as you do not make any major changes (quit your job, get married, take out another loan, etc.) after you are pre-approved for your loan, the closing process will move along much faster since quite a bit will have been done already.
If you are interested in purchasing a home in the local area and would like to discuss getting pre-approved for your mortgage, give me a call today! As a trusted Red Deer mortgage broker, I am happy to get your mortgage process started and to answer any questions you may have along the way!