Why Getting Pre-Approved Should Be Your First Step
If you’re planning to buy a home, you might be tempted to jump straight into browsing listings and attending open houses. However, before falling in love with a property, there’s a crucial step you need to take first—getting pre-approved for a mortgage.
Pre-approval is more than just a formality. It provides clarity on your budget, strengthens your negotiating position, and speeds up the buying process. At Oval Group, we always advise our clients to secure a pre-approval before making an offer. Here’s why.
What Is Mortgage Pre-Approval?
A mortgage pre-approval is a lender’s conditional commitment to lend you a specific amount of money for a home purchase. It involves a detailed financial review, including:
✔️ Income verification
✔️ Employment history
✔️ Credit score and credit history
✔️ Debt-to-income ratio (DTI)
✔️ Available funds for a down payment
Once approved, the lender will issue a pre-approval letter stating the maximum amount you can borrow. This document signals to sellers that you are a serious and financially qualified buyer.
Benefits of Getting Pre-Approved
1. Know Your Budget Before You Start House Hunting
Without pre-approval, you might waste time looking at homes outside your budget. Instead of guessing what you can afford, pre-approval provides a clear price range, helping you focus only on properties within reach.
2. Strengthen Your Offer in a Competitive Market
In a competitive real estate market, sellers receive multiple offers. A buyer with pre-approval stands out because the seller knows they can secure financing. In contrast, an offer without pre-approval may be seen as uncertain, increasing the risk of delays or financing issues.
Pro Tip: If you’re pre-approved for $400K but are making an offer on a home for $380K, ask your lender for a pre-approval letter showing $380K instead. This prevents sellers from assuming you can afford more and pushing for a higher price.
3. Identify and Fix Financial Issues Early
Pre-approval allows you to catch potential roadblocks before they become deal-breakers. If your credit score is lower than expected or your debt-to-income ratio is too high, you’ll have time to address these issues before making an offer.
4. Speed Up the Closing Process
Once you’re pre-approved, your lender has already reviewed most of your financial documents. This reduces delays during the underwriting process, making it easier to close on your home quickly.
How to Get Pre-Approved for a Mortgage
1️⃣ Gather Your Financial Documents
- Recent pay stubs
- Bank statements (last 2-3 months)
- Tax returns (last 2 years)
- Proof of assets (investment accounts, savings)
- Credit report review
2️⃣ Choose a Lender
- Oval Group can connect you with trusted mortgage lenders.
- Compare interest rates, loan terms, and fees.
3️⃣ Submit Your Application
- Provide your lender with the required documents.
- Expect a credit check and verification of your financial details.
4️⃣ Receive Your Pre-Approval Letter
- The lender will issue a letter stating the maximum loan amount you qualify for.
- The pre-approval is typically valid for 60-90 days.
Start Your Home Search with Confidence
If you’re ready to take the first step toward homeownership, getting pre-approved is the smartest move. Oval Group is here to guide you through the process and connect you with top lenders who will help you secure the best mortgage for your needs.