Buying your first house and getting on the property ladder is everyone’s dream. It also can be a bit daunting.
Your speaking to estate agents, mortgage advisers, gathering up documents that are required, being told this from one person, and something else from another. It can all get confusing. And if you are self-employed and want to buy a house, it can be a bit more stressful.
Years ago when I was in the mortgage business, one of the things I found that worked best for first time home buyers was to get pre-approved for a mortgage.
Many times people go find a house they want to buy, and then apply for a mortgage. It’s like putting the cart before the horse. Suppose you don’t qualify for a mortgage, or you qualify, but not for a mortgage large enough to buy the house you have found. All disappointing and can be avoided.
However, if you get pre-approved for a mortgage, you know you qualify, and also how much of a mortgage you can be approved for. You can then shop for houses in that price range and know you will not be disappointed.
The process of getting pre-approved for a mortgage is the same as getting a mortgage after you have found a property.
The bank or mortgage lender will review your finances, how much of a deposit you have, your income, review your monthly bills, and also look at your credit report.
The lender will then approve the loan and advise you the maximum loan amount you qualify for based on various interest rates that are available. They will also advise on you various types of loans.
The only exception is there is no property yet.
The loan approval can have a time limit, such as 60 days, and some things may need to be re-verified once you find the property of your choice.
These pre-approval are always conditional upon the inspection, appraisal or valuation of the property. If the property does not meet the standards required, or is not a value the lender allows, the approval is not granted.
Getting pre-approved takes the worry and stress out of buying a house, especially for first time home owners.