Are you looking into the benefits of receiving a pre-approved mortgage for your next home? While obtaining a pre-approved mortgage isn’t necessary, it is still advisable. It informs homeowners how much house they can reasonably afford.
Nothing is more frustrating than finding your dream home only to be denied a mortgage. Fortunately, our mortgage broker in Newmarket can sit down with you to provide a guideline.
The 5 Advantages of Mortgage Pre-Approval
The benefits of a pre-approved mortgage boil down to providing peace of mind. They can also save you time and money because they give a parameter, allowing you to set your expectations reasonably. With that in mind, these are the top five advantages of mortgage pre-approval:
Understanding borrowing capacity
Pre-approvals provide testimony from lenders indicating a maximum amount—under established conditions—that they will agree on for a home purchase. It allows homeowners to gauge the amount of money to be borrowed at the start of their journey.
Planning your monthly payments
In knowing your borrowing capacity, you can plan what the monthly payments will look like. The amount spent will be determined by the size of your down payment. If the payments appear unattainable, you can lower the amount that you want to pay or increase the down payment.
Planning monthly payments lets you know what to budget for ahead of time. Too many homeowners experience remorse later when they realize they cannot afford their homes. Debt keeps mounting until they feel it has a stranglehold on their finances. Sometimes, it becomes too great. They fall behind and face foreclosure.
With some pre-planning and realistic expectations, however, homeowners can avoid these problems and enjoy their homes for as long as they decide to live there.
Simplifies property searches
As mentioned above, falling in love with a property and not being able to afford it is a huge discouragement. You have your heart set on a house only to discover it is out of your price range. Thus, the search continues.
Searching for properties with a broker becomes easier by understanding borrowing capacity, as well as monthly payments. Time is saved by avoiding going to homes that are out of your price range, allowing you to focus on houses within your budget.
Mortgage pre-approvals tell sellers that you are serious about buying. It makes a stronger case when you bid on a property because you can demonstrate that you have the means to pay for it. There is nothing more frustrating than for sellers to agree on a contract to sell their home to someone who then backs out.
Pre-approvals also indicate that you have an ideal financial situation. It provides added negotiating power for a promise to purchase. In the case of multiple offers, you will have the advantage against those who do not have pre-approval.
Protection for interest rates
Having a pre-approval in place ensures a guaranteed mortgage rate. Depending on your lender, this may be guaranteed for several months. This is especially beneficial if the economy is favourable for rate increases.
Mortgage pre-approvals are free. You are not obligated to move or buy property. It thus makes sense to take this added step for your benefit.
Where can I go for advice for a mortgage broker in Newmarket?
If you are looking for a mortgage broker in Newmarket, check out what we have to offer at Northwood Mortgage. We will sit down with you and discuss what works best for your situation. Our firm has a variety of flexible options based on your requirements. To book your appointment, please get in touch with us at 888-495-4825 or 416-969-8130. You can also contact us on our website here. We can guide you through every step of the mortgage process.