What's All the Buzz about Pre-Approved Mortgages?

When you first contact a real estate agent and ask for help finding a home, one of the first questions that will be asked is whether or not you have been pre-approved for a mortgage. If you are a first-time home buyer you may not have even heard of this term before. Here is some of the most important data you should know about these types of mortgages and why they are so important.

What Are They?

A pre-approved mortgage is an assurance from a lending institution that you will be approved for a mortgage once you have found a home. There will be a limit on the amount of the mortgage, which will be clearly stated on the letter you receive indicating a pre-approval. With this in hand, you'll know your limits for the homes you’ll be able to look at according to their prices.

Why They Are So Important

Getting a pre-approval can often be a deciding factor if you are negotiating on a home against multiple offers. Since you have taken the time to make sure that you qualify to make the offer, you are considered to be a serious homebuyer over others that haven't gone ahead to get their ducks in a row beforehand.

Pre-Approved Mortgages in Calgary

There are some agents that won't even want to work with you if you haven't received pre-approval for a mortgage. These agents have worked with many clients that were ecstatic about purchasing a new home but when it came down to getting a mortgage it became a stumbling block that would hold up the entire process. When you can show an agent that you have already been accepted for a mortgage at a certain amount, he'll be able to work within your financial limits and will dedicate his time to finding you a great home knowing that you are committed to the process.

You Can Expect a Quicker Close With a Pre-Approved Mortgage

In most cases all that will be needed for the final closing is the title work and the property appraisal done on the property. The closing process is faster and a lot easier when the mortgage has already been confirmed for acceptance.

From the Seller's Viewpoint

Anyone that has sold a home before knows that it's not only about receiving offers on the property but rather actually getting the deal closed that is of prime importance. A pre-approval letter takes a lot of the muss and fuss out of the closing procedure and keeps things much more simple. As a result, it's easier to negotiate on the smaller issues and finally work out a deal that satisfies all parties involved.