It seems like you can find just about anything online these days. Groceries, alcohol, clothes, there’s just less and less reason to leave your house!
The online wave has affected the home buying process, too. Especially the way we look for homes. Zillow is synonymous with home searching; you can spend hours scrolling through neighborhoods and imagining yourself in a new setting. When you find the perfect home and are ready to put an offer down, you need to be ready to act quickly. That’s where a mortgage pre approval comes in handy.
If you don’t already have a pre approval, don’t worry! You can get a mortgage pre approval online conveniently and quickly at Bison State Bank. We are your partners in your home buying journey, and our goal is to be every client’s first step toward a better future.
To further that goal, our online mortgage professionals put together these helpful tips that everyone should know when looking for a mortgage pre approval online. You can also reach out today to talk with our online mortgage experts and begin your home buying journey!
Pre Approval vs Pre Qualification: Know the difference
In simple terms, a mortgage pre approval or pre qualification is a preliminary evaluation of a person’s potential buying power. With this information, buyers have a better understanding of what level of house they can afford, and realtors can adjust their showings to better fit their client’s needs.
While pre approval and pre qualification seem like similar terms on the surface, there are a few major differences. Before applying for anything online you should know what you’re getting in return.
Here is a quick breakdown of the difference between pre approval and pre qualification:
- Mortgage pre qualification: A mortgage pre-qualification is based completely on data submitted by the consumer. A loan officer will take down some basic information (like your income, debt, assets, etc.) and give you a rough estimate of how much you can borrow. These numbers aren’t set in stone, and the estimated loan amount is far from a sure thing.
- Mortgage pre approval: This is typically the next step in the process and what our loan officers prefer to deal with. A client provides their prospective lender with hard information about their financial history, essentially submitting their official mortgage application during the process. The prospective lender will then check the client’s credit history and other financial records to get a clear picture of just how much the client can borrow.
More on pre approval vs pre qualification
Bison State Bank loan officers typically only deal with mortgage pre approval because we believe it’s the most useful for our clients. With pre approval in your pocket, you have a full understanding of what you can—and can’t—afford, and you’re ready to hit the ground running with an offer and loan application at a moment’s notice.
Don’t wait to get started
If you’re even possibly considering entering the home buying market, you can go ahead and get pre approved for a loan. Your pre approval lasts for 90 days, so you have time to find the right home or even shop for a better loan from a different lender.
Your pre approval should be the foundation for your home search, not just a step along the way. With it, you have a complete picture of your purchasing power, and you can adjust your search accordingly.
With an early pre approval and complete financial picture, you minimize the risk of falling in love with a home that you ultimately can’t afford. And when you do find that perfect match, a mortgage pre approval online from Bison State Bank gives you a leg up when submitting your offer.
Related: How to stand out when making an offer on a house
After 90 days, your pre approval will expire, but only because your information needs to be updated. Banks and lenders typically prefer to have up-to-date information going back at least 90 days, so once you’ve hit that threshold, you will likely need to re-apply for pre approval.
Be prepared before applying
Your time is valuable, and having the right materials at your fingertips before applying for a mortgage pre approval online saves you some precious time.
Proof of income
Before applying for a pre approval, a borrower will need to establish their income base. This requires items like:
- Your latest paystubs
- Your most recent tax returns or W-2 form
- Proof of income letter from your employer
The proof of income letter isn’t necessary in all cases, typically only if you have recently changed jobs.
Proof of assets
A prospective lender will need to see bank statements and investment account statements to ensure you have the funds needed for down payment and closing costs. This information is incredibly important for calculating a borrower’s purchasing power.
We’re passionate about finding the right loans for each client’s needs at Bison State Bank, and that means not putting you in a situation where you can’t afford your mortgage or closing costs. Through gaining a full understanding of your current financial situation, we can tailor your loan directly to your specific situation and make sure you’re happy with your home, and your finances.
Related: How much money do you need to buy a house?
Credit information
A credit report contains information such as a person’s personal identification, credit account information, collection items, and public records. Lenders use the information on a credit report to get a better picture of a person’s financial situation. It helps them determine whether to lend money or not, and what interest rates to charge on loans based on their own financial risk of doing so.
Make sure your credit reports are not frozen, as we will verify with all four major credit bureaus during the pre approval process.
Unlike other lenders, however, the team at Bison State Bank doesn’t just see you as a number on a piece of paper. We take the time to get to know your situation and do our best to understand your goals to set you on the best path toward the future you envision.
Related: How credit affects your home buying power
You’re not tied to your first approval
Submitting all of your information to a lender understandably seems like a final step. You’ve given over all of this sensitive information once; you likely don’t want to submit your information to anyone else again any time soon.
It’s a powerful urge to accept your first loan offer or approval numbers, but shopping around with different lenders is actually an important step in your homebuying process. While we’re proud to offer incredibly competitive mortgage rates and custom mortgage solutions at Bison State Bank, we also still encourage people to look around and compare us to other mortgage lenders.
More on finding the right online mortgage lender for you
The good news is, once you’ve submitted your information for a mortgage pre approval online, you already have access to everything you need. That is, if you didn’t already have everything prepared like we recommended earlier!
And don’t worry about multiple approval applications affecting your credit score long term. When a lender requests certain financial information, like your credit report, that’s called a hard inquiry. This might have a slight effect on your credit score, but it shouldn’t be a drastic change that will affect your loan.
Don’t stress out about interest rates
When applying for mortgage pre approval, lenders will present you with various potential rates. Particularly if you shop around with multiple lenders. We boast some of the best online mortgage loan rates in the country, but unfortunately, we can’t control the constantly evolving interest rate market.
That constant evolution isn’t necessarily a bad thing for home buyers, however. With many refinancing options available, you’re not necessarily tied to your entry rate for the life of your mortgage.
Refinancing can help homeowners with a variety of situations, including lowering interest rates, changing mortgage term length, reducing payments, or even getting cash in hand.
Related: When to refinance your home
Get your mortgage pre approval online at Bison State Bank
We understand how important it is to have a competitive advantage in the housing market. That’s why we offer quick and convenient mortgage pre approval online, so you have a strong weapon for your home buying journey.
Our experienced mortgage professionals are passionate about helping our clients take their first steps toward a better future, and pre approval is one of the most important early steps.
The loan officers at Bison State Bank won’t pressure you into a loan that’s not suitable for your needs. We are professionals in this industry with the know-how to fit each client with a tailored loan solution. We strive for customer satisfaction, and we’re not satisfied until you are.
Contact us today to see how our approach—honesty, integrity, and experience—helps you find the right home loan solutions.
