A pre-approval is one of the greatest assets a home buyer can get.
Pre-approval is a written assessment of your worthiness for a loan. When you seek pre-approval for a home loan, your lender will assess your ability to pay as well as your credit history in order to decide how much they are willing to lend you.
Although you can make an offer and go through to the start of property settlement without having pre-approval, most home buyers get pre-approval before they make an offer. Some home buyers even get pre-approval before they even start going to home opens so they know what can can afford before they start looking. The most upsetting event can be if you find a home you love but find out you do not qualify for that high of a mortgage.
The benefits to getting a pre-approved mortgage are:
1. You get a better choice of properties. When you visit an open house and talk to a real estate agent, by letting them know that you have pre-approval, you are making them aware that you are a serious buyer. Once a real estate agent knows you’re serious about buying, they’re likely to call you about potential properties before they’ve even hit the market, giving you a better choice of properties and potentially more negotiating room.
2. You get a better deal. To sellers, pre-approval is almost like a guarantee that the deal they strike with you won’t collapse. Sellers want certainty because if the buyer they choose can’t get finance, the seller will have to start marketing their property all over again. To them, this certainty is worth money. I’ve seen several deals where the seller has accepted a lower offer because that buyer had pre-approval and the higher offers didn’t so that was one less subject to get released.
3. You won’t waste time looking at homes you can’t afford. Getting pre-approval will give you a much better idea of what homes are within your price range so you’ll know in advance which properties are too pricey to waste your time on.
4. You won’t have your heart broken. Imagine falling in love with a property and even going so far as to make an offer on it – only to find out at that it’s out of your price range! Save yourself the disappointment of having a deal fall through by knowing in advance what you can (and can’t) afford.
If you’re planning to buy a home, get a pre-approved home loan from your chosen lender. The seller and real estate agent will thank you for it and you’ll be glad you did. If you would like to get some contacts for mortgage brokers call me at 250-305-7034.