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Six Reasons Why You Need to Get Pre-Approved Before Shopping For a Home

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Why a Pre-Approval?

If you are serious about buying a home, you want to make sure you are able to afford it. In a lot of markets around the United States, the number of buyers who are looking for homes often is more than the number of homes available. In this competitive market, you need to stand out to let sellers know you are serious. One way to do this is to get pre-approved for a mortgage. 

 

You Know What Your Budget Is

When you get a pre-approval, this helps you and your real estate agent identify homes that are within your  budget. You don’t want to fall in love with a house that’s out of your price range and then not be able to afford it. But many first-time buyers believe they need to put 20% down on a home. The good news is that there are some loans that only require 3% down and even some government-backed mortgages have 0% down payment requirements!

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Home Buying Guide

You Know What You Can Afford

A pre-approval from a lender will give you the full picture of your financial options. Your loan officer will review your credit and financial history, as well as the down payment funds you have saved, and determine how much house you can afford. You can also see which loan programs might be available to you. Again, you won’t fall in love with a home that’s way outside your budget–you can stick to realistic properties that are within your reach! 

You Stand Out in a Competitive Market

In today’s real estate market,  sellers usually won’t even look at an offer unless it has a pre-approval letter attached.  It demonstrates that you are a serious buyer, you have already put the work into the process of purchasing, and you’re ready to jump on the deal. 

You Build a Relationship With Your Lender

When starting to work with a lender for a loan, you are required to submit some initial paperwork. That’s just the start of the great teamwork between you and your loan officer. Your loan officer will help you navigate your current home purchase, plus they can also help you down the line with home refinancing, home equity loans, and much more! 

You Speed Up the Transaction

Since your mortgage loan officer will request financial documentation and determine your loan program, much of the work is done during the pre-approval stage instead of after you make an offer. Getting as much done as possible before the offer can help streamline the transaction, since your loan officer already has most of what they need to complete your loan.

You Better Understand the Cost of a Mortgage

Going through this process will help you have a better grasp on what costs you’ll have when you get a mortgage and giving you the confidence of knowing that buying a home is within your reach. Educating yourself beforehand ensures you won’t be surprised by anything at closing. 

Picture of Kathleen Weatherford

Kathleen Weatherford

Hi, I’m Kathleen Weatherford, Realtor® with ABODE Real Estate in the Pikes Peak Region. I want to be your resource for all things real estate in El Paso County, Teller County and the surrounding areas. Come with me as I explore all the best events, shopping, restaurants, outdoors and lifestyle in the Pikes Peak Life area!

PIKES PEAK LIFE

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