Ask the Expert: Should you get pre-approved for a mortgage?

George Hackett
President & COO Coldwell Banker Pittsburgh

Those who are currently looking to buy a home should most definitely be pre-approved for a mortgage. If you’re thinking about buying a home, a pre-approval is a fast and simple way to make your home buying experience easier from start to finish.

When buying a home, you want to position yourself as a buyer who can afford the house and has already been approved for your mortgage. This makes you a more attractive buyer and is an advantage when negotiating against multiple offers.

Pre-approval uses basic information as well as electronic credit reporting to determine whether a lender will loan you money. If you are pre-approved for a mortgage, the lender has given you a commitment to support your new purchase. Pre-approval however should not be confused with Pre-qualification. Pre-qualification is not a mortgage pre-approval but simply an estimate of what you can afford. When you pre-qualify for a mortgage, the lender also collects basic information regarding your income, monthly debts, credit history and assets, and then uses this information to calculate an estimated mortgage amount. It is important to know in a pre-qualification the lender has not yet committed to supporting your financial needs and, therefore, you have not received an actual guarantee of funds.

Buyers who are pre-approved have a buying power – the ability to make offers, negotiate prices and terms, and even sign a contract to buy. A pre-approval letter proves to the seller and real estate agent that you’re financially ready to buy a home. Coldwell Banker Home Loans offers one of the most reliable pre-approvals in the industry, and you can get a decision in minutes over the phone, online, or in person with a mortgage advisor. In fact, our pre-approval was ranked #1 out of 17 of the top lenders in the U.S. Coldwell Banker Home Loans makes home loans easy in many ways including the strongest service guarantees in the industry.

ASK THE EXPERT ARCHIVE:
Should you get pre-approved for a mortgage? (6/6/2008)
What are The Steps Involved in Selling a Home? (5/30/2008)
Buying a Newly Constructed Home (5/23/2008)
How to select an agent? (5/16/2008)