Today, a lot of us are looking for pre approved of our mortgage before we go out into the market to find our dream home. Thus, what is a pre approved or pre arranged mortgage? Mainly it’s a guarantee from the lender, in black and white or writing. They will provide or lend us a certain amount of cash, for the buy of a house, at a certain rate that they will promise that rate or fee and offer for a period of time everywhere from 30 days up to 120 days.
Due to this, It is smart or not to take this action? With the lender approving us for a mortgage, we can search for a house knowing that if we spot one we like, in the certain price range we have already been pre approved for, we can make an offer knowing we already have the mortgage accepted. This gives us a tremendous advantage when making an offer because there is no “financing clause or condition” attached to the offer. So we can see if there are various offers on the table that are qualified “upon financing”, the seller is going to be attracted and concerned towards us even if it is slightly fewer or less.
Usually, a real estate brokers is likely to get In touch with us as the fact that we already have pre approval for our mortgage and will work the best for us to find the house we want! Why? Logically because they have a qualified buyer (us) with the cash in their wallet to buy! What these brokers have to do is find a house that meets our desires, in the price scope we are approved for and they have a sale.
Success or getting our mortgage approved before we buy has some other benefits. It is not too worrying and stressful. When we can reduce some of the emotional stress that is close to buying a house, then we are in a much healthier position to make good sound options. Indirectly, means that we have gone through the process of credit assessment and our capability to make the monthly mortgage expenses, utilities, taxes before hand and not at the time of the propose or offer.
This method may well serve as a wakeup call in terms of what we thought we could afford and what we really can afford. A lot of us when getting a pre approved mortgages is that we will spend the highest amount we have been approved for. Most of us will overlook and make a mistake about this! Here is reason. If the mortgage rates rose, and definitely yes, we will be surprised at how the rate increase can jack up our monthly mortgage instalment. If the rates became 40% then we can expect our monthly instalment to increase by 25% or more depending on our amortization time, so it is clever to keep this in mind when we are calculating how much of a mortgage we are secure with.