Advantages of Pre-Approvals for Buyers
If you haven’t started your home search, or are still looking, a pre-approved loan is the perfect first step toward owning your new house. A loan pre-approval basically means that a lender has agreed, in principle, to lend you a certain amount of money but hasn’t proceeded to a full or final approval. Why is this important? It gives you a clear picture of what your spending limits are and gives you peace of mind that if you find a property you’re really interested in you can move quickly to make an offer!
Benefits of Pre-Approvals
1. Pre-Approvals Give You Confidence
Pre-approval allows you to go into the search for your new home prepared and knowing exactly how much you are able to afford. When you meet with your broker they will help you work out your repayments so that you know you can sustain the financial side of things and be comfortable in your new home. This means you can start house-hunting with a firm budget and peace of mind!
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Pre-approval allows you to know exactly how much you are able to afford.
2. Pre-Approvals Give You a Competitive Edge
A pre-approval may put you in a stronger negotiating position than other potential buyers who do not yet have pre-approval.
3. Lasts Anywhere From 60-90 Days
A pre-approval gives you plenty of time to look for a property because it typically lasts anywhere from 60-90 days. If by chance you can’t find a suitable property within this time, you can re-apply easily with your broker.
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A pre-approval may put you in a stronger negotiating position.
4. Protects You From Interest Rate Increases
Pre-approval also saves you from unpredictable increases in interest rates. With markets that are constantly changing, this is definitely a key consideration. A pre-approved mortgage guarantees you an interest rate for a period of 60 to 90 days, which allows you to make a purchase without rushing or delaying the transaction.
Bottom Line
This blog is for educational purposes, we recommend you to seek your own independent legal, financial, and taxation advice before acting on any information in this article.
If you have any questions about getting pre-approved to purchase a home feel free to contact us or talk directly to one of our loan officers will assist you.
