Mortgage Advice: The Benefits of Pre-Approval

image001(1)This week is Mortgage Week at Better Homes and Gardens Real Estate Executive Partners. We are proud to present Sean Collett, President of Mortgage First Augusta, who shares some important information about the mortgage process.

The mortgage process can seem formidable, but it’s really not that complicated. One reason it seems complicated is that the terminology used in mortgage lending is often confusing. The terms “pre-qualification” and “pre-approval” sound like the same thing, but they’re not. Which one do you really need as you begin house shopping

Pre-Approval Loans

This is a more in-depth (and more useful) version of pre-qualification. When you request pre-approval for a mortgage loan, the lender will actually start to verify your financial background. This is what sets it apart from pre-qualification. Lenders will request a variety of documents from you, such as tax records and bank statements. They will also check your credit score. The pre-approval process gives you a more accurate idea of how much you can borrow.

Approved Loans

This is the final approval by the lender. It takes place after you have chosen a home and made an offer. In order to reach this stage, you would need to give your mortgage company a copy of the purchase agreement. You’ll also go through an extensive underwriting process that could take up to 30 days. The lender will probably require a home appraisal, as well.

Benefits of Pre-Approval

Before looking for houses, home buyers should get pre-approved for mortgage loans (unless they’re paying cash for the house). You could spend days or weeks looking at houses in a certain price range, only to find out that you qualify for a lesser amount. When you start with the pre-approval, you’ll have a pretty good idea what you can afford.

Getting pre-approved for a mortgage helps you identify any problems you have (too much debt, a low credit score, etc.). The sooner you find out about these issues, the more time you have to correct them.

Additionally, sellers will take you seriously. This is especially important in an active market where multiple offers are a reality.

Pre-approval also helps you narrow the field when house hunting. Once you know how much the lender is willing to offer, you can shop within that price range.

Items Needed for Pre-Approval


  • Most recent year-to-date pay stub
  • Most recent W2’s
  • Most recent 30-day bank statement
  • Last 2 years tax returns


As you can see, this process helps you in several ways. No, it’s not a commitment from the lender. You can’t get that until you’ve actually found a house. But, it’s the next best thing. It gives you a price range for what you can afford when the time comes.


Of course, there is more to know about mortgages, but this is often a point of confusion for home buyers. If you’re in the market for a home, you should speak with a mortgage lender as soon as possible. Every situation is unique, but a home mortgage is not as difficult to get as many people may think.



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