I am sure you are seeing everywhere that interest rates are great and now is the time to buy. You’ve been thinking to yourself that buying a home is starting to sound better and better and maybe there is even a cute one for sale in your neighborhood. Before you schedule a showing or start posting pics of your dream house on social media, getting a pre-approval is a must and here is why:
- You’ll know if you are really ready.
To get a pre-approval, a lender takes a look at specific requirements in deciding if you can truly purchase a home. They look items such as your credit and, income to ensure that when you do find the home you want, you can move forward to actually purchase. Also, if you are not able to qualify at the current time a skilled lender might be able to put you on the path to be approved in the future.
- You will get a price range to work with.
Since the lender will look at your information, they should be able to give you a price range that you qualify for. This will help you look for houses that are real possibilities for you to buy and help cut wasted time from your search.
- It weights your offer and increases your negotiating power. Once you find the home you would like to buy; your next step is to submit an offer to the seller. When you have a pre-approval, it shows the sellers that you are financially able to purchase the home and also improves your power to negotiate the terms. If you put in an offer without a pre-approval, the seller has no way of knowing if they accept your offer you will actually be able to go through with the purchase.
- Saves time. As soon as you decide on the home you want and submit an offer you probably will want the process to happen as quickly as possible. Having already submitted much of the paper work and opened a file with a professional loan officer you can greatly shorten the from contract to close.
- Agents will want to work with you. On average, a person will look at 8-10 homes before they decide which they would like to buy. Some people even look at up to 30!! Every home you look at takes time behind the scenes for your agent. Typically, an agent searches for home to match your criteria, then sends you information on homes that meet your search terms, and ask which you would like to see. Once you decide on the homes to look at, the agent schedules the times with the seller or their agent. The agent will also have to meet, with you to show the home as well as any follow up that is needed. Agents spend hours preparing and showing each home, so it makes sense that they want to be sure you can actually purchase a home when you find the right one.
In closing, a pre-approval is great for everyone. It allows you to exactly how much house you can afford. It gives an agent incentive to help you in your search (and trust me having an agent is a must, especially if it is your first home), and helps to streamline the entire process with you and your chosen lender. To see if you are ready to buy a home and how much you will qualify for click here to be matched with one of our Utah lenders.