So you are searching for a home. Did you get a pre-approval on your mortgage or have yet to get it done? If the latter is your situation, tend to this first before you start looking for properties. We will tell you why this is so important.
Indeed, there was a time when borrowers sought for pre-approval in the end, but those days are gone. The market conditions have changed and you must act according to the new circumstances.
Sellers also find things tough
You find the home buying process difficult, right? So do sellers; they find it tough to sell a house and at times, they have to close the deal as quickly as possible. Even if they like your offer, they cannot wait for weeks for your approval.
You have to know your affordability
Getting pre-approval for a mortgage means you can afford the loan today and even in the time to come. This is really important because if you default on your payments, you may have to face a foreclosure. When you get pre-approved, you know the exact differences between a $200,000 and a $1million loan, and you will know which one is affordable for you. Once you know this amount, the value of the house which you buy should be that much or less than that.
There are other buyers in line behind you
Almost every house that goes on sale will be found online. Yes, this helps make things easier for you, but it has also changed the way in which the real estate market works. In the past buyers waited for correspondence from their agents. Not so any more. As soon as a house goes on sale, every other buyer out there comes to know about it, thanks to text notifications and emails. An efficient method but it also increases the competition. One property and so many buyers want it, which implies you need to act fast.
The point is that when you like a house you cannot wait to get approval on your mortgage, you need to have it with you so that you can proceed forward with the deal. Fail to do this, and the house will surely go to someone else and you will still be waiting for a pre-approval.
So now you know why pre-approval on your mortgage matters so much. So before you step in the market, deal with this first.