June 22, 2023

What is a Guaranteed Mortgage Pre-Approval?

Guaranteed Mortgage Pre-Approval at United Home Loans

If there’s one purchase you want to be most confident about, it would likely be your home. So, once you make the decision that you’re ready to buy, how do you start a confident home buying process? We suggest that the answer is with a guaranteed mortgage pre-approval. In this article, we will talk about what that is, how it will help, and why it’s much better than the alternatives.

What is a Guaranteed Mortgage Pre-Approval

First, let’s talk about what a “regular” mortgage pre-approval is. When you’re ready to start looking for a home, you go to a mortgage banker to get pre-approved for a certain loan amount. To do this, the mortgage banker will review your assets (how much money you have), your income (to calculate how much you can afford on a monthly basis), and your credit (to see what loan programs you may or may not qualify for). Based on these three factors, your mortgage banker will provide you with a purchase price, down payment, and monthly payment that you can afford. They issue you a pre-approval letter that shows your Realtor you’re serious about shopping within a certain price range and proves to sellers that any offers you make are valid.

Now, what’s the difference when it comes to a guaranteed mortgage pre-approval? A guaranteed mortgage pre-approval is essentially a fully underwritten loan that is just waiting for a final home address and purchase price. In the mortgage process, things are likely to pop up. There are a lot of moving pieces to obtaining a loan and that’s just the way it goes. Because a guaranteed mortgage pre-approval is fully underwritten, you go through all of the steps of the mortgage process and work out all of the potential kinks that would have otherwise stopped you from closing before you even start looking. The pre-approval letter that is issued by your mortgage banker is a guarantee that you are approved for the loan.

The Benefit of a Guaranteed Mortgage Pre-Approval

Shop Confidently

There’s one feeling a guaranteed pre-approval can help you avoid. And that’s when you’re on your way to see a house that you love but you can’t stop worrying, “Can I really afford this? Is this going to work?” And then you see this perfect home and want to make an offer, but have to talk to your mortgage banker first. Depending on how quickly your mortgage banker responds, the time that passes can feel like an eternity. With a guaranteed mortgage pre-approval, there’s no worry and no waiting period to make an offer.

Make Strong Offers

When inventory is limited, you want to be in as competitive a position as you can be. Sellers will receive multiple offers and, in addition to considering the amount of money offered, need to discern which buyer is most likely to close on the home without issues. Your real estate agent will be able to communicate to the seller’s agent that your pre-approval is guaranteed, information that the seller’s agent will communicate back to their clients as they help them review offers.

No Unwanted Surprises

Buying a home is complex. Your mortgage banker and real estate agent will be at your side every step of the way to guide you through the process with ease and expertly navigate issues as they arise. Even so, potentially eliminating issues altogether is a good deal for everyone involved. By obtaining a guaranteed mortgage pre-approval beforehand, you can expect the process from offer to closing to be, relatively, “no big deal.”

Close Quickly

Because a guaranteed mortgage pre-approval means you have been through the more lengthy part of the mortgage process already, the time frame from offer to closing can be significantly shorter. Some sellers will look favorably on an offer in which the buyer can close quickly. Plus, your mortgage banker can opt for a shorter lock term on your interest rate, which might get you a better rate.

The Alternatives to a Guaranteed Mortgage Pre-Approval

When you’re ready to buy a home, you can immediately jump in using online search tools and start scheduling listings. The main issues with this are that it’s hard to figure out home financing without the help of a professional, sellers may not take you seriously without representation, and you may find yourself in a situation where you’ve offered to buy something you cannot get approved for. In short, jumping into the home buying process alone could mean time and effort spent for no reward.

Alternatively, you can start the process with a regular pre-approval letter from a mortgage banker and the representation of a buying agent. This is a well-informed way to start the process. It could, however, lead to discoveries of financial or credit report issues after you have made an offer. In short, a guaranteed mortgage pre-approval is the most assured way to shop for a home.

Get Started!

If you’re ready to start the homebuying process, contact our team to obtain your guaranteed mortgage pre-approval.

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