You are ready to jump headfirst into the market and find your dream home. Congratulations!
The only issue is that you now need to figure out how to give yourself the best ability to win in an ever-competitive housing market. The first step in the housing search is to find a Loan Originator from whom you can get “pre-approved” for a loan; this is a document that states the home value range for which you qualify.
In this blog, we will take you through the different ways you can strengthen your offer with documentation from your Lender and how they benefit you in your journey to homeownership!
What is a Pre-Qualification?
The first option is the standard Pre-Qualification. This is the type of approval you have probably seen advertised on the internet when you google “how to get a mortgage.”
These are preliminary approvals that is based on the information you provide without any documentation to back it up.
In other words, this approval is not guaranteed until you are able to provide documentation that proves that everything you answered on that quick online form is correct.
So, if you were to put in an offer on a home with only this type of letter, the seller would most likely lack confidence in your offer, because it is not a guarantee you will get that amount of funding.
What is a Pre-Approval?
Compared to a “pre-qualification,” the pre-approval has an added layer of vetting, which instills much more confidence in the seller that you will get approved for whatever offer amount you agree upon. To receive a pre-approval, there is a pull of your credit, and you must show documentation (such as bank statements and paystubs) that confirms your eligibility for a mortgage.
What is the Princeton Pre-Commitment?
Upfront underwriting (or a TBD Approval) is the gold standard.
The Princeton Pre-Commitment is a that has already been through underwriting. Therefore, instead of a price range for which you qualify, the Loan Officer gives you an exact dollar amount for which you have been conditionally approved.
The Princeton Pre-Commitment gives you an advantage because of the confidence it instills in the seller and their agent. It assures them that your funding is almost certainly in place.
While there is never a guarantee that one’s offer will be accepted, there are things that you can do to give yourself better odds. Princeton Mortgage is proud to offer the Princeton Pre-Commitment, to give our borrowers the best chance at landing their dream home!