PRE-APPROVED MORTGAGES
It is highly recommended that you get your mortgage loan pre-approved before you start looking for a new home. You will have a better chance of securing a new home mortgage if you are pre-approved, you want to have as many positive advantages as possible when shopping for a new home.
There are a few different types of mortgage loans for types of buyers, those who are not pre-qualified or pre-approved, those who are pre-qualified, and those who are pre-approved. In understanding the appeal of each type of buyer, you need to put yourself in the seller's shoes. The buyer is a complete stranger who is asking that you remove your home from the market and trust that they can afford to buy it. As the seller, which type of buyer would you prefer:
Not pre-approved
These buyers provide no evidence that they can afford to purchase your property.
Pre-qualified
Pre-qualified buyers have met with a mortgage specialist and discussed their finances; income, expenses, assets and liabilities. The mortgage specialist has given the buyer a letter stating, based on financial conversation, what the buyer can afford.
Pre-approved
Pre-approved buyers have submitted a complete loan application and provided a mortgage specialist with written evidence of income, expenses, assets, liabilities and credit. All information has been verified by a lender. The mortgage specialist has provided this buyer with a pre-approval certificate stating that the buyer has been pre-approved for the loan to purchase the home.
As a potential buyer, a pre-approval certificate will help you stand out to the seller, making your offer a more solid one, and giving you the competitive edge.
Never be satisfied with a verbal agreement, make sure you get all agreements in writing! For example the seller may verbally agree to include the refrigerator in the sale, but it is not contained on the written purchase and sales agreement - you should not sign this until it is included. Only aggreements that are written in a contract are enforceable - avoid oral agreements at all costs.