How a Mortgage Preapproval Helps Homebuyers
By Leah Seavecki, Vice President, Mortgage Lending Manager
Buying a new home can be an exciting time, but it also may bring questions such as, "What kind of mortgage payment will I be looking at?" and "How much will I need for a downpayment?"
Wouldn't it be reassuring to have answers to these questions before you start looking?
A mortgage preapproval provides prospective homebuyers with financial peace of mind as they make what is likely one of the largest purchases of their lives. With a preapproval, your mortgage lender will be completing a mortgage application so you'll be asked to provide documents to verify your income and assets such as pay stubs and bank statements. They will also run a credit check to verify your debt and borrowing history to determine if credit can be approved, so you'll want to be sure you are serious about purchasing in the next few months.
By going through this important process in advance of your house hunting, you will know exactly how much home you can afford. You'll also receive a conditional commitment in writing for an exact loan amount which may put you at an advantage with home sellers as you will be able to show that you have taken these initial steps of the mortgage process.
Looking forward. Once you've found the home of your dreams and your offer is accepted, you'll work with your lender to take your preapproval to a full mortgage application status. This includes getting an appraised value of the home, working with a title company to verify who owns the property, and having the home inspected to make sure it is in good condition. This underwriting process takes a number of weeks but is important to making sure everything is in order and ready for closing.
Keep in mind, there's no fee to get your preapproval started at First State Bank. If you're thinking about buying a new home, contact one of our mortgage lenders to set up a time to sit down and discuss your needs.