One of the first (and most important) steps you should take when buying a home is getting a mortgage pre-approval. Securing a mortgage pre-approval lets sellers know you’re serious and will help your offer stand out in a crowd. It tells real estate agents that your time is valuable and alerts lenders that you may be taking out a mortgage in the near future. Here are our top 4 reasons why getting a mortgage pre-approval should be your first step in securing your dream home.
You’ll Know How Much You Can Borrow and Afford
Getting pre-approved gives you a solid understanding of what you can afford, what you’ll be able to borrow, and your overall budget. It can be easy to get caught up in the excitement of finding the perfect home but it’s important to fall in love with one that makes sense financially. Speaking with a lender will give you a conditional green light on what you can afford and what price range you need to stay within.
It’s important to note that lenders calculate what you qualify for based off of your gross income, which is your income before taxes are taken out. Consider your daily, weekly, and monthly expenses when determining what budget works best for you.
You’ll Gain a Competitive Advantage When Making an Offer
Currently, we are in a seller’s market. Inventory is low so buyers need to be as competitive as possible when securing the perfect home. Get a step ahead of other buyers by securing a mortgage pre-approval. Sellers want to choose someone that’s prepared and a mortgage pre-approval gives sellers confidence that closing the deal won’t get derailed by some unseen financial obstacle.
You’ll Be Alerted to Potential Problems
A lender will typically review your credit history, current gross income, assets, and debts when granting a pre-approval. Paying down debts, saving for a larger down payment, or resolving inaccuracies on your credit report should all be taken care of before making an offer on a home.
You’ll Accelerate the Home-Buying Process
A pre-approval allows you to move faster when you’re ready to make an offer. A mortgage pre-approval gets your foot in the door when it comes to competing with other buyers for your dream home.
Talk to a loan officer today about getting a leg-up in the housing market by securing a pre-approval loan.