Have you ever been told you should get Pre-Approved for a Mortgage before Looking at Houses? Shopping for a home today has evolved since the time of newspapers and word of mouth. Most of today’s home buyers are starting their search online before they’re actually ready to make a move, and sometimes get ahead of themselves in wanting to view a home in person prior to getting their finances in order. If you’ve ever had an agent deny showing your home until you’re pre-approved, it’s because we’re looking out for your best interests.
A mortgage pre-approval is written confirmation from a lender or broker that you’re able to borrow money to purchase a home up to a certain amount. Your pre-approval will be based on your income, employment history and asset documentation you supply at the time of application, in conjunction with your credit history, and sometimes more. Here are 5 reasons you should get a mortgage pre-approval before starting your home search.
1. You need to know your financial limits
Being a financially prepared shopper can save you grief and unexpected surprises down the road. There’s nothing worse than falling in love with a home, and then finding out either a) you aren’t pre-aproved for the amount, or b) you can’t afford it. Going into the home search with a pre-determined spending limits narrows down your options, and makes the process more efficient.
2. Your offer will hold more power
In certain market conditions, homes will attract more than one offer at a time. If your offer is being weighed against another, you’ll want your offer to be as attractive as possible. Being pre-approved can be reassuring for a seller trying to make a decision on which offer to choose.
3. It saves time
Having a mortgage pre-approval shortens your conditional period, and expedites the time to close. If there are any bumps in the road on your way to pre-approal, it is much wiser to iron those out prior to entering into negotiation.
For next steps, be sure to check out the Home Buyers Guide!