Getting pre-approved simply means that your lender has calculated how much of a mortgage they’re willing to offer you, depending on your down payment and current financial situation.
There are two advantages to having a pre-approved mortgage. First, you know exactly what you can afford when shopping for a new home. Second, when you make an offer, you’re likely to be taken more seriously. Your seller will know that you are a qualified buyer and capable of purchasing their home. Furthermore, the pre-approval will also let you know what your financing options are since there are numerous loan programs available to home buyers.
Depending on the loan program you are approved for, there can sometime be some restrictions on the type or condition of properties that you can purchase. For example, many first time home buyer programs will come with strict habitability clauses requiring that the house be in livable condition and generally free of all safety issues. If it is in need of any major renovation or work, it may not qualify for the type of loan program you are using.
This is why the pre-approval process is crucial to the home buying process and by choosing a knowledgeable real estate agent they can help guide you through the process and find the perfect home for you!