Not sure if you should obtain mortgage pre-approval before starting your home search? You’re not alone. We can’t tell you how many buyers have asked us about this crucial step in the purchase process. Put simply, getting pre-approved by a lender is a sign that you’re well-positioned to receive a mortgage. While it’s not a guarantee, it will bring you closer to full approval – and give you a very good idea of how much you can expect to receive. As far as we’re concerned, the benefits of completing this process far outweigh the effort involved.
If you’re about to start your search for a home, here are five reasons to get pre-approved beforehand…
1) Sellers will take you seriously
Purchasing a home is a big commitment, and buyers don’t always make it to the finish line. So it’s understandable that sellers are sometimes hesitant to make a deal. Fortunately, there are things you can do to boost their confidence in your offer. Obtaining pre-approval is a great first step. By going through the process with a lender, you’re sending the message that you’re a serious buyer. You’re showing home hunters that you’re ready, willing, and financially prepared to buy. Trust us, it can go a long way!
2) It can help you set your budget
It happens all the time. Buyers think they can afford more square footage than they can, so they wind up looking at homes outside their price range. The best way to avoid this outcome is by creating a thorough home-hunting budget. You’ll want to factor in all your ongoing expenses, but the amount you’re pre-approved for is a great jumping-off point. Many buyers find that pre-approval is just what they need to get the process started.
3) You’ll be equipped if there’s multiple offers
In a competitive-buying situation, it’s important to put your best foot forward. That usually means making an impressive bid – and showing that you’re capable of following through on it. Unfortunately, when a property is in demand, it’s all too easy for buyers to get caught up in the excitement and make offers they can’t afford (or receive financing for). Sellers know this, which is why they’re often more comfortable going with a buyer who’s already been pre-approved.
4) It can help you get prepared
Home buyers who don’t get pre-approved run a much higher risk of having things fall apart due to a financial issue. It’s possible to be completely unaware of credit errors that could impact your mortgage application, for example. Having a lender comb through your finances as part of the pre-approval process will highlight these problems early on. It could save you a lot of heartache – and help you decide if there are steps you should take to improve your situation before jumping into the search.
5) You’ll be one step closer to closing
Another reason to get pre-approved? Once your offer is accepted, you’ll be closer to completing your transaction than a buyer who’s only pre-qualified. Put simply, there’s a lot of financial background checking involved in obtaining a mortgage. Luckily, if you’ve gone through the pre-approval process, a lender has already done a lot of the leg work. The result is usually a more efficient purchase process – and less time before you close!
There are few things as exciting as buying a home, but there’s no denying that the process can be stressful. That’s why it’s so important to get started off on the right foot. Fortunately, obtaining mortgage pre-approval can lay the groundwork for an easy, low-stress purchase!
Have questions about buying a home on Hilton Head? Get in touch—we’ll walk you through the process and give you an idea of what’s available on the market!