The Best Decision You’ll Ever Make? Getting Pre-Approval Before You Search for Your New Home

What are you looking for in a new home? Is location important to you? Do you prefer a certain style or type of house? What about square footage and lot size? If so, then your research has just begun. But before going any further, have a qualified mortgage lender pre-approve your loan. You’ll be glad that you did!

Why is this step so important? Here are 3 reasons!

Pre-approval clarifies your focus and increases your confidence.

A mortgage pre-approval is a great way to know for sure that you can afford the home before going through all of the time and energy in your search. It’s also important because getting approved isn’t guaranteed, even if you have enough cash on hand or think interest rates are favorable at present.

In order to get accurate results, lenders need detailed information about how much money you’re bringing with you into this transaction and what future expenses look like (such as gas bills, insurance, or other utilities). The more they know upfront, the better able they will be to structure an affordable mortgage plan for your needs.

The process typically takes around 20 minutes from start to finish; it includes filling out some basic personal and employment information, along with answering questions about your monthly expenses and income.

Once pre-approved, generally about 24 hours later, you can start looking for your new home confidently, knowing that you have a mortgage company behind you to provide the financing should one of these properties be right for you. You’ll know how much you can spend, as well as what your approximate monthly mortgage payment will be.

Pre-approval increases your chances of being selected if you’re in a bidding war.

Put yourself in the seller’s shoes – if you have two equal offers coming in for your home, are you going to choose the one that is more solid (with a pre-approval) or an offer where the buyers haven’t yet determined if they qualify for the purchase price? As a real estate agent, I have seen the domino effect of deals falling through when a potential buyer wasn’t pre-approved. It can be heartbreaking for multiple parties, who then may have their future plans derailed when an offer falls apart. In the current market, not having a pre-approval may mean that your offer simply is not even considered.

A word of caution – no real estate deal is final until both parties “sign on the dotted line”. Even with pre-approval. A mortgage can still be denied, such as in the case that buyers go out and take on additional debt (no new cars, boats or credit cards, please!) or experience a sudden job loss or reduction in income.

Pre-approval saves YOU heartache.

By starting the process of a pre-approval, you’ll discover if there are any obstacles in your way, such as poor credit or insufficient income. The best time to start this process is BEFORE you begin your search for the perfect home! It’s better to know now than later, when it could cost more money and ruin your chances in securing the house of your dreams. By discovering any outstanding issues early in the process, you can correct inaccuracies in your credit report, work to resolve any outstanding credit issues, and monitor your debt to income ratio.

A mortgage pre-approval is an inexpensive and quick way of knowing if you can afford a new home, before wasting hours looking at houses that are out of your price range.

By being pre-approved, you can be more confident in the offer you present to a seller, as well as have a knowledge of where your upper limit is, should you end up in a bidding war, or in a situation where you need to have an escalation clause.

I’m here to help.

As your realtor, I can help guide you through this process. Connecting with the right people, the right lender and having a team of people educated in the ins and outs of real estate may make the difference in helping you get into your perfect new home!

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