Title:
Before You Buy
Why Get Pre-approved?
Word Count:
509
Summary:
Find your home,
find your realtor, write the contract, now you're finished. Right? Wrong!
Pre-approval - Why it's so important.
Keywords:
mortgages, home
buyers, loans, home loans, lenders, mortgage professionals, home purchasing,
1st time home buyers, real estate market, buying a home,
Article Body:
OK. You’ve made
the decision. You’re ready to buy a house.
Great! You’ve got that dream home
pictured in your head. Now all you have
to do is find a Realtor, make your offer and move in. Right?
Wrong.
Your first step should be to find a trustworthy mortgage professional. But that’s not the fun part, you may say.
Why start with a mortgage professional?
In a nutshell, this can save money, time and increase your bargaining
power.
Your mortgage broker is going to be able to tell you first if you can qualify
to purchase a home at all. Second, if
you are in the running for purchasing, he or she can tell you how much home you
can qualify for. Think about it. Do you and your Realtor want to run around
for a month or two worth of weekends, finally find your dream home, just to
find out that you cannot afford it?!
That’s a lot of time, and time is money (or at least a lot of wasted
weekends). Wouldn’t it be better up
front to know what you can and cannot buy, zero in on that, and achieve that
wonderful feeling of success? Of
course.
Well, you may have already thought of all that.
However, did you realize that the seller of your dream home may give you
preferential treatment if you’re pre-approved?
The seller has a life too and time lines like the rest of us. They want deals that are going to work. They don’t want their home under contract,
just to have the deal fall through because the buyer cannot qualify! So, let’s say you make a bid on a house and
another party makes a bid at the same time for the same amount. The other bidder is pre-approved, you
aren’t. Which bid should they
accept? Obvious. Another scenario, let’s say you (not
pre-approved) make a bid and another bidder bids slighter lower but is
pre-approved. Which bid would you
accept?
And one last matter to cover, there are different levels of pre-approvals. The lowest level might be called pre-qualification
and this involves the mortgage professional taking your information (income,
expenses, etc.), putting it all together and letting you know how much home you
can qualify for based on the numbers you provide. Another level of pre-approval is for the
mortgage professional to run the loan through automated underwriting (getting
more technical, here) to get an approval provided that all your info can be
verified. The highest level would be
running the loan through a lender and actually doing all the verifications. Obviously, the higher level of pre-approval
gives you more to stand on and carries the most weight when bidding on a
home. In any case, your mortgage
professional should provide you with a letter stating on what level you are
pre-approved.
Hopefully by now the picture is clear, call that mortgage professional BEFORE
starting your house search. And maybe,
just maybe, the process might even be fun.