Not everyone is born with a silver spoon to buy a home with upfront cash. A large sum of money is required to invest in a home. Therefore, a good section of people opts for a residential mortgage which comes with a great deal of money to acquire a residential property.
Apart from affordable residential mortgage rates, this form of credit has a number of benefits for borrowers. However, the advantages may vary from individuals’ financial portfolio and needs. Understanding the disparity, many lenders provide a pre-approval offer for their customers. A professional mortgage broker acts as a mediator between the lender & his client.
If you are thinking to opt for a residential mortgage, you need to be well educated with the term pre-approval offer. Not to mention, lenders usually decide on the residential mortgage rates during this pre-qualification phase.
More on Pre-approval Offer:
There is a prevalent notion on pre-approved offer. Many believe it is drafted to benefit mortgage brokers. The reality screams the opposite. The process of a pre-approval is meant to prove a borrower’s creditworthiness to the lenders. Precisely, a mortgage pre-approval is the very first & the most important step which decides the loan amount and also the mortgage rates.
Things to Know About Loan Pre-Approval:
It’s More than a Process
As mentioned earlier, when it comes to the mortgage pre-approval, the process is quite extensive. The potential lenders take a dive in your financial portfolio to determine your eligibility. Usually, the expert brokers recommend starting early with this process for a quick approval.
To increase the chances of your approval, you must provide the lender with necessary documents. Some of the relevant documents are:
- Income certificate or business proof
- Identity card
- Essential information on the existing assets if any
- Details on debts
- Tax certificates
Post verification of these documents, the lender usually decides on the loan amount and the residential mortgage rates. The amount that gets locked during the pre-approval phase is usually the maximum loan a borrower usually gets. However, you can always seek guidance from a professional broker to increase the loan amount cap.
Entails Proper Investigation
It usually takes 60 to 120 days to complete the verification process. During this tenure, the lender may ask to furnish the financial statements based on your salary account or investments. Make sure to suffice their needs. A financial institution puts all the information to evaluate your financial condition. Little discrepancies lead to greater troubles. Therefore, it is always advised to keep in touch with your residential mortgage broker to grab the best offer.
Important Factors to Take Care of
Throughout the process of pre-approval, you must stay on guard for easy cash flow. Some of the important aspects you need to pay heed are:
- Make sure you have a stable source of income during this period
- Losing a job or outsourcing a huge sum from an external source may hurt your creditworthiness
- Response to the lender’s queries categorically to increase your chances
If you part with these facts, you will likely decrease the potential to get pre-qualified for the loan or else attract high residential mortgage rates. Ensure a smooth process of pre-approval and get a substantial loan amount by working in a close association with a professional mortgage broker.