Many buyers are so excited to start house hunting that they forget about the mortgage pre-approval process. And first-time homebuyers might not even be aware of the process; buying a home just isn’t something most people are taught how to do!
So if you’re hearing about pre-approvals for the first time, or if you’re too excited about your home search to pause for pre-approval, you might be wondering can I skip the mortgage pre-approval process?
Can You Skip the Mortgage Pre-Approval Process?
Technically, yes, you can skip the mortgage pre-approval process. There is no law or regulation requiring you to get pre-approved.
However, it’s in your best interest to get pre-approved. Pre-approval doesn’t take long, and it comes with several benefits.
The Benefits of Completing the Mortgage Pre-Approval Process
There are three key benefits to getting pre-approved for a mortgage.
1. Knowing how much you qualify to borrow
Without a pre-approval, you don’t know how much money a lender will loan you for your mortgage. So you could be looking at homes that are out of your price range. Heaven forbid that you fall in love with one of those homes!
It’s better to know upfront how much you qualify to borrow so you can look in the correct price range.
2. Presenting a stronger offer when you find the right home
Sellers have no interest in entertaining an offer from an unqualified buyer. A mortgage pre-approval assures the sellers that you’ll be able to secure the funding to close the deal if they accept your offer.
3. Closing on your new home more quickly
Getting pre-approved for a mortgage means one less step in the closing process once your new home is under contract. This could lead to a shorter escrow period, which allows you to get into your new home as quickly as possible.
Does Mortgage Pre-Approval Hurt Your Credit?
A mortgage pre-approval shows up on your credit report as an inquiry. This might decrease your credit score by a few points, particularly if you’ve had other recent inquiries into your credit (for an auto loan or credit card, for example). This slight dip has no long-term effect on your credit score, and likely won’t have much, if any, effect in the short-term either.
How to Get Pre-Approved
Getting pre-approved is a simple three-step process:
Choose a lender. You can always switch lenders before you buy, but it’s quicker and easier to get your loan from the lender who issued the pre-approval. So do a little research early to find the lender with the lowest interest rates, best terms, and best service.
Apply for pre-approval. You can do this on your chosen lender’s website in around 15 minutes.
Provide the necessary documents. To complete the mortgage pre-approval process, you will need to provide proof of identity, proof of income (pay stubs or tax returns), bank statements, and rental history. You’ll also consent to a credit check. This will give the lender everything they need to calculate how much money they can lend you.
You’re welcome to contact us with any questions about the mortgage pre-approval process. And once you’re pre-approved, our well-qualified real estate professionals would be happy to meet with you to discuss your needs and preferences. We regularly hear about listings even before they hit the market, so having a Sequoia agent in your corner could give you a head-start in this competitive market. We look forward to serving you.