Pre-approval is an important part of the home-buying process. It allows potential home buyers to know how much of a loan they can get before looking for a home. Pre-approval also helps the seller know that the buyer is serious about the purchase. In 2023, potential home buyers will need to be prepared for some changes in the pre-approval process.
First, potential home buyers will need to have a higher credit score to qualify for pre-approval. The current minimum credit score requirements are 640, but in 2023, that number could be as high as 700. Buyers should also expect to provide more documentation, such as pay stubs, tax returns, and bank statements.
Second, the mortgage process will become increasingly automated. Mortgage lenders are looking to streamline the process by using technology and artificial intelligence to verify borrowers’ information and make credit decisions. This means that potential buyers will need to be comfortable with technology and have their financial documents ready to upload.
Finally, buyers should expect to pay higher interest rates in 2023. The current average interest rate on a 30-year mortgage is 3.24%, but that number could go up to 4.5% or higher
Getting pre-approved is an important first step towards buying a home. It lets you know what you can borrow and shows sellers you’re serious about purchasing their home. Connect with a local real estate professional and a trusted lender so you have the tools you need to purchase a home in today’s market.