Buying a home is an exciting, but stressful endeavor. Ease the stress of this process by arming yourself with as much information as possible before you even start looking at properties. One of the best pieces of information you can have when looking for a new home or property is a mortgage pre-approval.
A mortgage pre-approval tells you how much a certain lender will finance for you to purchase a property. Mortgage pre-approvals come with various restrictions and requirements which are set by the lender issuing the pre-approval. If all of these restrictions and requirements are not met, the lender may not go through with the mortgage.
While a mortgage pre-approval is not required to view or bid on most properties, having one on hand comes with certain advantages over the less prepared home shopper:
Know What You Can Afford
There’s no way to know how much a lender will finance your home purchase without requesting a pre-approval. Without knowing exactly what you can afford, you’re at higher risk of viewing and falling in love with homes outside of your price range. It’s hard to give up the hope of an inground pool or a master ensuite once you’ve already seen them, so it’s better to avoid any property priced above your maximum budget altogether.
Knowing the most you can possibly spend on a new home will also allow you to plan for the addition of a mortgage payment, taxes, and insurance once you’ve settled on a new place. It’s important to make sure that your estimated mortgage payment and other home-related expenses will fit into your practical budget, not just your total pre-approved budget on paper.
Get the Best Terms
There’s no rule saying you can only get one mortgage pre-approval, and smart shoppers will opt for several in order to compare rates and terms. Just because one lender offers the lowest interest rate doesn’t necessarily mean they’re offering the best deal; other factors like fees and penalties can make a big difference in your decision. Apply for a pre-approval from at least five different lenders to get a well-rounded picture of all your options.
Show Sellers You’re Serious
It’s a seller’s market these days, so buyers need to come with their A-game if they want to nab their dream property, especially if they need to finance it. Realtors are reporting dozens of offers being submitted, many of them cash, within just hours of a property hitting the market. Set yourself apart from the pack with verification from a lender that you’re financially healthy enough to actually purchase the property in question. Without a mortgage pre-approval, you’re just another face in an endless sea of potential buyers.
Preparing to purchase a home should begin long before you actually start viewing properties. In addition to securing a mortgage pre-approval, you’ll want to think about desired neighborhoods, school districts, outdoor spaces, HOA’s, and more. The more prepared you are to begin your search, the happier you will be with the properties you and your realtor end up viewing, and the better chance you’ll have of actually winning that bidding war.
Arm yourself with all of the knowledge and confidence you need to make an educated home purchase within your budget. Once you know what you can afford, trust the ace team of real estate experts at Douglas Realty to help you find the southwest Florida property that’s a perfect fit for you and your family. Call (239) 542-6906 or contact us online to find out how we can make your real estate dreams a reality today!