Why Every Home Buyer Needs a Pre-Approval Before Home Shopping
It is natural to get excited when you are shopping for a new home. Looking at houses online is a fun pastime for many people, even if they aren’t in the market for a home, so buyers often start their home buying process by searching for homes for sale online.
But they are missing a very important first step that could cost them time and money.
The first step buyers should take as they consider jumping into the home buying market is to talk with a reputable lender and get pre-approval. What does that mean?
A lender will look at your financial situation and help you establish a budget for a mortgage you can afford. They will also explain the various loan options that are available to you so you can choose one that works best for your circumstances. There are often special deals available to specific groups of people, such as first-time home buyers, veterans, those who could benefit from down payment assistance, and more. With this information in hand, you will know the price range for your house search, if you need to be ready to make a down payment…and how much that might be, and the amount of your monthly mortgage payment, making the home search process much more efficient.
Lenders will also help you understand how changes in the interest rate can impact your budget. Interest rates can change daily, and an experienced lender can help you lock into the best rate available to you so you have more purchasing power for your new home.
When you find a home you love and decide you are ready to make an offer, your buyer’s agent will present this pre-approval letter with your offer to show the sellers that you are a serious buyer. In today’s competitive real estate market, most sellers won’t consider an offer without this pre-approval.
“It is expected in the current market that most homes we list for sale in the St Louis Region will have multiple offers to consider,” said Chad Wilson, team leader of The Chad Wilson Group. “One of the first things our sellers look for is if the buyer has been pre-approved and if that approval was made by a lender that has a stellar reputation. They won’t waste their time considering an offer if that quality pre-approval isn’t included with the offer. They will just move on to the next one.”
If you are ready to get serious about buying a home, let’s talk! If you don’t already have a lender you trust to help you get pre-approved, we can refer you to one that we routinely work with to help you get started. It’s the best first step you can take!