Loan Pre-Approval Can
Be A Negotiating Advantagel
Before wasting time looking for Ahwatukee homes outside your affordability
range, you must first determine how much home you can afford. A prudent
homebuyer will set a monthly payment budget that will give he or she stress-
free financial flexibility. An Ahwatukee, Arizona mortgage lender will also
determine how much it believes the buyer can afford.
When you apply for a home mortgage, the lender will consider your credit
history, income, assets, debts; employment along with other factors to
determine your credit-worthiness. If your loan request is approved, they will
set a maximum loan amount that the lender determines you can afford. And,
the better your credit score…the better the interest rate they will give you
which positively impacts your monthly payment.
A Home Loan PreQualification
If you want a quick-gauge on what a lender could be willing to loan, you can
request a “prequalification” assessment. Essentially a prequalification is a
“test-run” preceding a formal mortgage loan application approval. Based
upon information you provide to the lender, it will determine the likelihood of
an actual approval and approximate mortgage limit affordability.
A prequalification to purchase a home is not binding upon your lender since it
is only based upon information provided by you that has not been verified.
You as the buyer, are as well not obligated to use that particular lender for
your home loan The prequalification process is generally quick and free-of-charge.
A Mortgage Loan PreApproval
Based upon a formal mortgage loan application, the lender will initiate the
formal process of verifying your credit, income, assets, debts, the formal
process of verifying your credit, income, assets, debts, employment and
credit score to determine loan approval or rejection. If approved, your
lender will issue a letter acknowledging preapproval with a specified mortgage
ceiling. This preapproval is binding on the lender for a specified period of
time. There is usually a modest fee applied that may be refunded at close of escrow.
A “prequalification” will give you a very close approximation of mortgage
affordability should your actual mortgage loan application be ultimately
approved. The prequalification sends the message to the seller that you
could afford to purchase the home if your application is successful.
A “preapproval” gives both the buyer and the seller greater confidence of a
successful purchase transaction. As the buyer, a preapproval gives you a
greater negotiating advantage over a “non-approved” buyer. Often a seller
will accept a smaller price offer when the buyer has been preapproved for
the purchase price.
Now go house-hunting in Ahwatukee, Arizona.
Articles of interest to those seeking a home mortgage.