5 Reasons The Timing Of Your Mortgage Pre-Approval Matters
Posted on: 4 January 2023
Buying a home is a stressful process for most people, so anything that can make it easier is welcome. One of the best tools you can get while home shopping is a mortgage loan pre-approval. But when you get that pre-approval is key to its success. Here are a few reasons why timing is so important.
1. Pre Approvals Expire. The pre-approval doesn't last forever. Many may be valid for up to several months, but some expire as early as a month later. This means you don't want to go through all that work and end up not using it during its lifetime.
2. You May Pay a Fee. Going through the steps to provide pre-approval takes work on the lender's part, so they may charge a fee for the application. The rules of this fee and how it may relate to future loans is up to each lender. If you may pay an application fee, you'll want to minimize it by getting as few pre-approvals as you can.
3. It's a Hard Credit Check. Credit checks come in two varieties: hard and soft. Soft credit checks don't affect your credit score, but hard checks may lower it temporarily. The reason? A hard credit check generally indicates that you're taking out new credit. Too many hard checks in a short period look suspicious to lenders. Pre-approval is a hard credit check, so you don't want any more than is necessary.
4. You May Not Have Time. Most timing issues for pre-approvals involve having them done too early. But you don't want to wait too long. If you are buying during a tight housing market, you'll compete with many other offers and buyers. You want to stand out from the crowd by being as ready to go as possible. Having a pre-approval in hand is one of the best ways to do this. But if you must go away and get one, this defeats much of its purpose.
5. It Takes Some Work. Like the actual mortgage loan application, a pre-approval application requires details about yourself, your income, your resources, and more. You may need time to put all this together, so don't act too late. However, if you time your pre-approval and mortgage within a short time frame, you may only have to do the work once.
Where to Start
Ready to get started on your pre-approval? If it's too early, could you get a pre-qualification instead? Start by learning more about the mortgage approval process by meeting with a lending service such as AJM Mortgage Inc.
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