Many Americans believe that the first step for buying Columbus Ohio homes is to shop around for them. Unfortunately, few people are aware of that the most critical aspect of home buying should be getting a pre approval for mortgage loans. The result is that those who are planning to buy Columbus Ohio homes end up wasting too much of time and energy.
Are the terms 'pre approval and pre qualification similar?
There are many who use the terms pre qualification and pre approval interchangeably. However, it is important to know that pre qualification is an informal process where the Ohio real estate lenders, with the help of credit card details, assets, income and debts provide a rough estimate of the amount of loan one can afford. This process is usually free and takes up only few hours.
In contrast to pre qualification, pre approval is a more formal and time-consuming process. Here the Ohio real estate lender will cross check the credit history, income and debts of the person who has applied for a pre approved mortgage loan. On successful completion of the verification process, lenders issue a formal letter stating the amount of mortgage loan that has been approved and the timeframe for which it is valid.
Which one is better?
All those who are looking for Columbus Ohio homes are advised to opt for pre approval mortgage loan rather than pre qualification. Potential buyers of Columbus Ohio homes with pre approval loans are considered as serious buyers. In addition, there are several other advantages of pre-approved mortgage loan and it is considered crucial for zeroing on affordable Columbus Ohio homes.
- The greatest advantage of acquiring a pre approval loan is that Ohio home buyers know how much they can afford. This means that they can easily define the price range and concentrate on Columbus Ohio homes that fall within those criteria. In fact, many Ohio real estate agents prefer to work with buyers who already have pre-approved mortgage loans. The reason is that they want to avoid wasting their time by showing Columbus Ohio homes that the buyers are unable to afford. At times, they also go through the whole negotiating process, only to realize that the buyers' application for loan has been rejected.
- Pre approval loans also helps the buyers to know how much they can borrow to purchase Columbus Ohio homes and provides a rough idea of the monthly charges, interest rate and closing costs (in case one opt for the loan).
- Many people who are trying to sell off their Columbus Ohio homes prefer to choose buyers with pre approved mortgage loans. The reason is that it shows the willingness of Ohio homebuyers to acquire Columbus Ohio homes and convinces the sellers about the financial security of the buyers.
- Another advantage of pre approved mortgage loans is that Ohio homebuyers can relish a faster closing period. There is no window period for the mortgage loan application to be processed and this allows the Ohio real estate lender to wrap up the processing process fast. Many times owners of Columbus Ohio homes are in a hurry to sell off their properties and will give preference to those offers that allows a 2-3 weeks closing period.
- Many make the mistake of spending the total amount of the pre-approved loan. Instead, try to chalk out a monthly budget that will include the mortgage payments and other expenses.
Getting a pre-approved loan is easy; though it may cost few bucks, it is totally worth it!
Rebekah Whitman is a real estate consultant who advises and counsels real estate investors and helps them through the investment process. To access more information about Ohio real estate visit http://www.revealty.com/.