Homeownership is an exciting idea – an idea that prompts many daydreamers to set out on the search for the perfect home. The mistake here is in finding a home to fall in love with, and falling short on the financing. This is why pre-approval of your home mortgage loan is a critical first step. You should seek pre-approval before beginning to look at houses, and here’s why.
Applying for your home mortgage loan early in the process can reveal unexpected obstacles, like problems with credit, recent changes in employment or income, and loan programs that may or may not help you with your down payment. By finding these issues and solutions early on, you have time to make corrections or seek alternatives. When you sink your emotional teeth into property before you secure your funds, it can be utterly devastating to lose out on your dream home while somebody else snatches it up.
You have time to shop around for the best loan terms for you. Not all banks offer the same rates or terms. When you find the property first, before you find the loan, you find yourself in a frantic panic, willing to accept ordinarily unacceptable terms because you’ll do anything not to lose that house. But when you shop loans before properties, you have ample time and opportunity to walk away from any loan that doesn’t resonate with your circumstances.
How do you know what your budget for a house is before you’re pre-approved for a home mortgage loan? You may have an idea of what you’re willing or able to pay out in monthly loan payments, but that is not the same as knowing what you’re purchasing power is on real terms. Many people find the home they love, then find out they can only be financed for have if its cost. Again, heart-breaking. When you’re pre-approved for your home mortgage loan before you begin shopping, you know out of the gate what you can afford and what’s unreasonable.
Real estate agents invest in your home-buying journey up front. They don’t get paid until you seal the deal on your home. Would you run out on a meal without paying the check? Likely not. Nor would you be the type who would smuggle unpaid items out of a retail store. The same ideology applies to asking a real estate agent to work for you when you’re not certain you can buy a home or pay their fee. Your real estate agent may spend weeks or months helping you locate the perfect house. But if you can’t get the funds, that agent doesn’t get paid.
Multiple offers and bidding wars are real, especially in a market where inventory is low. When there’s a quality house priced competitively, you can bet your bottom dollar you’re not the only one wanting to make the purchase. When you’re pre-approved for your home mortgage loan, you have the upper hand against someone who hasn’t begun the application process. A seller would rather negotiate with you than to take a chance on someone else who may not be able to qualify for the home mortgage loan.
The home buying process can be lengthy. There’s no point in dragging out an already lengthy process by having to start from scratch with the financing while the home sits in wait. Having your loan in place before you make your offer expedites the closing process so you can get on with living instead of just daydreaming of what life will be like when you own your own home.
Pre-approval of your home loan accomplishes many tasks at once. You have the opportunity to prepare or repair your credit. You can shop banks for the best loan terms. Your budget is set out for you, clear as day.
You real estate agent will work diligently for you. You have more negotiating power against competing offers that haven’t been pre-approved, and you expedite the closing process. But most importantly, by securing your home loan first, you can afford to daydream with the knowledge that those dreams are leading to a future you’ve worked hard to secure.
Give The Eastside Real Estate Team a call today at 425-200-4093 to get your questions about home mortgage pre-approval answered and set up a time to tour available houses for sale in the area.