If you want to know how much house you can afford. If you want an edge over other home buyers. If you want a head start on your home financing, you want mortgage pre-approval.

What is mortgage pre-approval?

It’s a written statement from a lender saying how much they will likely lend you for a mortgage. Lenders set the dollar amount after examining the would-be borrower’s financial situation. A pre-approval letter, which is usually good for 90 days, is a conditional commitment.

Don’t confuse mortgage pre-approval with mortgage pre-qualification, when a lender estimates how much a borrower might qualify for without verifying their financial information.

How much house can you afford?

Mortgage pre-approval can tell you. This goes beyond the simple loan amount; pre-approval helps set your budget. Pre-approval offers insights beyond your monthly mortgage payment, factoring in bills, living expenses, money toward savings, and more.

Pre-Approval Means Negotiation Power

There’s good news for buyers in the DFW housing market: inventory is up, and bidding wars are down at this time. The not-so-ideal news? Sellers who have seen the market shift to favor buyers are digging in on price negotiation. Pre-approval could sway a seller who wants the security of a buyer who has their financing in order and is ready to make a deal.

While bidding wars are less common these days, there’s a good chance you will face off against another home buyer; we’ve found homes in the Dallas area generally receive two offers on average. You’ll want to make your offer with a pre-approval letter in hand.

Pre-Approval Saves Time

The moment you find your dream home, the clock starts. Nationally, homes stayed on the market for an average of 81 days at the end of 2024. In several DFW markets, however, homes stayed on the market for an average of between 43 and 48 days.

While the mortgage approval process can go quickly, the opposite can also be true. Especially if the borrower has a complicated financial profile or credit score issues.

Mortgage approval often takes 30 days on average, and that can go up to between 45 and 60 days during high-volume months. Your dream home could easily go to another buyer while you wait for loan approval. So why not get approved beforehand?

To discuss your mortgage pre-approval, contact a member of the Decker Group at (972) 591-3097 or connect with us online.