Before starting your search for a new home, the first thing a Buyer needs to do is get pre-approval from their mortgage lender. Even if you currently have a home and think a mortgage will be no problem, it is important to make that phone call first and here are the reasons why:
- Knowing that a Buyer is pre-approved by a lender is a point of safety for the Realtor. This helps them know that you are a serious Buyer and it provides proof of the ability you can really obtain financing before they start driving around looking at homes with strangers.
- A lot of time an energy is put into house hunting and agents don’t want to spend hours of searching with a client, only to find that they are unable to secure a mortgage at that time. A little bit of time invested by the Buyer helps the Agent want to invest time in them.
- Getting pre-approved helps save time and frustration. There is no sense in taking time to look at homes that are out of price range for the Buyer and a pre-approval helps set the buying parameters. It will only disappoint the buyer when they find something they love, but can’t afford.
- Sometimes there are simple, little glitches that need to be taken care of by a Buyer that will raise their credit scores and save time when actually trying to secure a mortgage. Sometimes it takes longer then expected to fix things and the Buyer could end up loosing out on getting the home they have their hear set on.
- Knowing your credit parameters in advance can help strengthen your negotiation ability. Especially if their becomes a multiple offer situation on a purchase, there is not time to wait while someone gets a mortgage approval. The stronger the lender, the more trust the Seller will have in accepting an offer, versus using an unknown lender who may be questionable.
Some Final Thoughts: Buying a home is a big deal. Having a pre-approval is not a guarantee of funding, but it shows an effort for all parties involved.
