If you’re a first-time home buyer, or just haven’t bought a house in several years, you may be wondering: What’s the difference between pre-approved mortgages and pre-approval? The answer is that they are very different. Let’s look at both to see which one is right for you!
You Know How Much You Can Spend
If you’re working with a real estate agent and need to get pre-approved, it can be done in advance of house hunting. You can then use the pre-approval letter to help negotiate the price of a home when you find one that fits your needs.
When you find a house that meets all of your criteria, ask the seller if they will pay part of your closing costs. If they say yes, then send them the pre-approval letter so they know how much money they will have available after selling their home and buying yours.
Helps Your Chances If Interest Rates Rise During The Process
If you are pre-approved for a mortgage loan, you can go ahead and make an offer on your house as soon as you find it. This is good because it will help speed up the process of buying a home. Also, if interest rates rise during this time, then you can be sure that your mortgage rate won’t change because it was already approved before the rates increased.
You can negotiate with the seller of a house much more easily if they know that you have been pre-approved for financing by a lender. You will be able to get lower prices on homes when negotiating this way since sellers know that they won’t have to wait around for weeks or months while waiting for approval from various lenders before making an offer.
If your credit score has some issues (it doesn’t matter what caused them), then getting pre-approved is one way around these problems because most banks will give out loans even if someone has bad credit history provided there are other factors such as income and employment which offset any issues in their credit history
The rbc pre approval is a process that can be done in person, by mail or online. Once you have been approved for the type of mortgage and terms that are right for you, we will send you all of the documents necessary to obtain your mortgage.
These include:
- The Good Faith Estimate – The GFE provides information on how much your monthly payments would be under different interest rates and amortization periods.
- Annual Percentage Rate (APR) – This disclosure shows how much interest as well as other charges such as title insurance premiums would cost over the life of your loan. It also includes an estimate of what closing costs might be based on the purchase price, term of financing and any applicable discounts or gifts from RBC Royal Bank.
Whether you’re looking to buy your first home or just want to upgrade, pre-approved mortgages can be a great way to get started. They give you an advantage when it comes time to look at real estate and will help you make better decisions since they limit the amount of debt that you have. If you need help getting pre-approved today, click here.
