For many, buying a home is one of the largest purchases they’ll ever make; that’s why it’s imperative you nail down the right budget before shopping around in your dream neighborhood.
That’s where a mortgage pre-approval factors into the homebuying process. Below, we dive into the basics of a pre-approval and how Wyndham Capital Mortgage’s Priority Purchase pre-approval program can help set you apart as a competitive buyer.
Pre-qualification vs. pre-approval vs. ‘Priority Purchase’ pre-approval
While the words are often used interchangeably, a mortgage pre-qualification isn’t the same as a mortgage pre-approval.
A pre-qualification typically involves a lender conducting a surface-level review of your finances to determine how likely it is that you’ll qualify for a home loan. This often includes you providing basic details about your job, income and overall finances. The lender may also check your credit through a soft inquiry, which won’t impact your credit score, according to myFICO.com.
On the other hand, a pre-approval goes a step further, in that it gives you a better idea of how much a lender could lend you toward your home purchase, as well as the mortgage interest rate and loan program you may qualify for.
As part of the pre-approval process, you’ll share information and documents related to your financial picture, including but not limited to your:
Your lender also will pull your credit history and score through a hard inquiry, since a pre-approval involves submitting a mortgage application. This kind of inquiry could affect your credit score and may cause it to temporarily drop a few points. In most cases, you can expect your score to fall by less than five points, according to myFICO.com.
Wyndham Capital Mortgage’s Priority Purchase pre-approval program, however, takes the process another step further by underwriting your pre-approval application. The program also allows you to customize your pre-approval letter based on the property you’re interested in buying, which can be done on-the-go from your mobile device.
See if you can get pre-approved today. Get started here.
One of the main perks of getting pre-approved for a home loan is that it could give you a competitive advantage as a homebuyer. Many sellers take purchase offers more seriously if there’s a mortgage pre-approval attached — they want to know that you potentially have the financial backing to close the deal.
A pre-approval also helps you identify how much house you could afford, which helps you avoid flying blind while touring properties.
Lastly, a pre-approval might buy you more shopping time, as it’s often valid for 60 to 90 days after approval. That’s valuable time to search and put in an offer on your dream home.
Pre-approval could help in an aggressive seller’s market
With a limited supply of homes for sale, competition is fierce in many housing markets. Having a pre-approval letter on hand could save you time during the homebuying process and potentially help put you ahead of the game.
At Wyndham Capital Mortgage, we offer an online pre-approval process through our Priority Purchase program. Gather your financial documents then click below to get started on your application.