The Guide to Getting Pre-Approved for a Mortgage: Tips to Boost Your Buying Power

Getting pre-approved for a mortgage can be one of the most powerful tools for homebuyers in today's competitive housing market. With low inventory and bidding wars, having a pre-approval letter in hand can give you a leg up on other buyers.

What Is Mortgage Pre-Approval?

There are several key benefits to getting pre-qualified before starting your home search:

• Shows sellers you can afford the home. With a pre-approval letter, you can assure sellers you are ready to move quickly. This gives you an advantage over other potential buyers.

• Locks in current interest rates. Interest rates fluctuate frequently. By locking in your rate, you protect yourself from increases.

• Saves time later in the process. Pre-approval frontloads the lending process. This avoids delays with paperwork and underwriting when you make an offer.

• Gives you a price range. Knowing your pre-approved amount helps you focus your home search on what you can realistically afford.

• Strengthens bargaining power. Pre-approval indicates you have financing secured. This allows you to negotiate firmly and potentially win competitive bids.

When To Get Pre-Approved?

Aim to get pre-approved as early as possible in the home buying process. There are no costs or obligations until you finalize the mortgage. With pre-approval, you can spring into action when you find the right home. Ideally, start at least 2-3 months before you plan to purchase. This gives you time to shop around with various lenders and get the best deal. It also accounts for any credit boosting you may need to improve your rate.

How To Get Pre-Approved?