Whether you are a first time home buyer or a seasoned real estate investor, it is extremely important to have a valid pre-approval at all times. A lot of house shoppers decide that they will ‘shop the market’ only after they have placed an offer in on a piece of real estate; however, this is not the best way to ensure you get the lowest rate or the best type of mortgage. With the volatility in mortgage rates, a rate that you see today may not be as good as the rates were a few months ago. In order to optimize your mortgage, you have to do a bit of work as well.

The Pre-Approval Process

When you first decide that you are going to go into the market to buy a new house, before ever going out of your house to look at properties, you should contact a lender or a mortgage broker. They will give you critical advice on the mortgage market, the real estate market, and all the details to assist you in your house shopping process. You will also be able to call on your mortgage specialist at any time if you have any questions or concerns. With the pre-approval, they will assign you the best rate, as well they will tell you what the maximum mortgage that they may be able to get approved for you.
Pre-approvals are usually good for anywhere from 60 to 120 days. With pre-approvals, the longer the pre-approval that you have, the better. This will insure that you know what your payments and interest rate is, even if the market fluctuates wildly. The pre-approval only takes a few days to have done by your mortgage broker, and it may be beneficial for you to get multiple pre-approvals for different types of products. Once you have received the pre-approval, then it is time to shop to find a house; however, this is not the end of the pre-approval process.

What to do Once you have Received the Pre-Approval.

Many people figure that once they have received a pre-approval, then that is the end of the process; however, that is only the beginning. Even though you have a guaranteed interest rate, you should still be watching the interest rates. If the interest rates go lower than the pre-approval that you have, then you should contact your lender or mortgage broker to have a new pre-approval created. This will allow you to always have the lowest pre-approval possible. Many mortgage brokers and mortgage professionals have a lot of clients; unfortunately, this means that they will not have the time to adjust your pre-approval on there own, and they will need a follow-up from you if you want an updated pre-approval. It is not very hard to check interest rates because almost every company has a website that you can visit at your own convenience to look at the interest rates. If you are able to check the interest rates once every few days, then you should be able to determine when you should get an updated pre-approval. When you do update your pre-approval as well, then this will allow you to extend the duration of the pre-approval as well.

Pre-approvals, not just for your First Purchase

Many home buyers assume that a pre-approval is only useful when making a purchase on your first house. It is also a myth that a pre-approval is for uneducated people looking to buy a home; however, this is not the case. If you are planning on buying a home, selling and purchasing a new home, or buying another property, then you should definitely get a pre-approval. The major benefits of the pre-approval is that a trained professional will look over all your details, provide you with expert advice, and protect your interest rate for a certain duration of time. If you are considering doing anything with real estate, then it is important to contact a mortgage professional.

A mortgage pre-approval is a crucial step in the mortgage process, and if you manage your pre-approval successfully, then it could be the difference in tens of thousands of dollars based on the final interest rate that you are able to obtain. Make sure that you discuss your options with your mortgage broker or lender to make sure that you work with them to try and get the best deal possible. It may seem like a bit of a hassle; however, in the long run, it will be very beneficial to manage your pre-approval.

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