Before buying a house, why should you get pre-approved?
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OK. You have made the decision. You are ready to buy a house. Great! You have a house of your dreams imagined in your head. Now all you have to do is find a real estate agent, make your offer and move right in.? Wrong.
Your first step should be to find a trusted mortgage professional. But that’s not the fun years, you might say. Why start with a mortgage professional? In short, this can save money, time and increase their bargaining power.
Your mortgage broker will be able to say first whether you qualify to buy a house at all. Secondly, if you are purchasing management, he or she can tell how much home you can qualify. Think about it. Do you and your realtor wants to run about a month or two at weekends, finally find your dream home, only to discover that they can afford it?! That, years long, and time is money (or at least many of those lost weekends). Wouldn’t it be better up front to know what can and can not buy, zero in it, and make the wonderful feeling of success? Of course.
Well, you may have already thought of that. However, you realize that the seller of your dream home can give preferential treatment if you, Are pre-approved? The seller has a life too and timelines, as the rest of us. They want it to go to work. They do not want their house under contract, only to have the deal fall through because the buyer can not qualify! So, now, years say that an offer on a house and another party makes an offer at the same time by the same amount. The buyer is pre-approved, do not, AOT. Which bid should be accepted? Obviously. Another scenario, now, say no years (pre-approved) to make an offer and another bidder bids slightly lower, but is pre-approved. What offer is accepted?
One final issue to cover, there are different levels of pre-approval. The lowest level may be called pre-qualification, and this implies the mortgage professional to take the information (income, expenses, etc), putting everything together and let them know how much house you can qualify for based on the numbers provided. Another level of pre-approval is for the mortgage professional to run the loan through automated underwriting (increasingly technical, here) to get an approval on condition that all its information can be verified. The highest level is running the loan through a lender and actually make all checks. Obviously, the highest level of pre-approval gives you more of the foot and carries the most weight to bid on a house. In any case, your mortgage professional should provide you with a letter indicating what level is pre-approved.
Hopefully by now the picture is clear, call the mortgage professional before starting their home search. And maybe, just maybe, it could even be fun.
