Finance Pre-Approval - What You Need To Know

Securing a mortgage pre-approval is a crucial step in the home-buying process. It not only gives you a clear understanding of your budget but also strengthens your position as a serious buyer. Here’s why getting pre-approved is essential and what you need to know.

Why Get Pre-Approved?

• Clarity on Budget: Pre-approval provides a realistic view of how much you can afford, preventing disappointment from falling in love with a home outside your budget.
• Credibility with Sellers: Sellers are more likely to consider offers from pre-approved buyers, knowing that financing is less likely to fall through.
• Faster Formal Approval: With pre-approval, the mortgage process is expedited, making the overall transaction smoother and quicker.

What Information is Required?

To get pre-approved, you’ll need to provide your lender with several key pieces of information:

1. Income Verification: Pay slips, tax returns, and employment history help lenders assess your ability to repay the loan.
2. Assets and Liabilities: Information on your savings, investments, and existing debts helps lenders understand your financial stability.
3. Living Expenses: your average expenditure on groceries, utilites, recreation, transport etc.
4. Identification: A government-issued ID such as passport, drivers licence or birth certificate

Keep Pre-Approval Updated

It’s important to note that mortgage rates can change, impacting your pre-approval. Ensure you refresh your pre-approval status whenever there is a significant rate change. This not only keeps your budget accurate but also demonstrates to sellers and agents that you are up-to-date with your financing capabilities.

By securing a mortgage pre-approval, you pave the way for a more efficient and successful home-buying experience. Always stay informed and proactive about your financial standing to make the best decisions on your journey to homeownership.

Contact SP Financial Solutions if you would like any further information.