In our recent blogs, you will find that we mention how important it is to get pre-approved before you start looking for a home. Why is getting pre-approved so important? Keep reading to learn more.
During the pre-approval process, your lender will take your application, pull your credit, and review your income and assets. Doing this at the very beginning of your homebuying journey (yes, even before you start looking on Zillow) is the best way to learn how much home you can actually afford, and how much you can borrow for a mortgage. This process will also uncover any issues you might have before you start your house hunt.
In today’s abnormal housing market, it is important to be intentional and competitive. When you start your homebuying journey by getting pre-approved, you will be able to hand your pre-approval letter to the seller, which proves you can afford their home. This sets you apart from other offers the seller may have and shows that you are a serious buyer.
The current inventory of available homes is low and the homes that are currently on the market are selling very quickly. This is creating very serious competition between buyers. The National Association of Realtors (NAR), states that homes are receiving an average of 3.8 offers for sellers to consider. In turn, bidding wars are very common once you put an offer on a house. Although, when you are pre-approved, this puts you in a better position to win the bidding war, because the seller has proof from your lender that you can afford to buy their house.
Freddie Mac explains:
“By having a pre-approval letter from your lender, you’re telling the seller that you’re a serious buyer, and you’ve been pre-approved for a mortgage by your lender for a specific dollar amount. In a true bidding war, your offer will likely get dropped if you don’t already have one.”
There are other ways that you can make your offer stronger than others. One key tip to strengthening your offer: make sure you have a great team on your side, such as a knowledgeable mortgage banker and real estate agent. The stronger your offer, the more advantage you have over the other buyers competing for your dream home.
There is no doubt that the current housing market is like no other! Before you start your house hunt, you want to make sure you are pre-approved. This will allow you to have a stronger offer letter, the buyer will know you can afford their home, and you will be able to smooth out any bumps before you go to put an offer on a home. If you would like to start the homebuying process today by getting pre-approved, connect without an experienced team of mortgage experts.
Topics: Real Estate Agents, Freddie Mac, Mortgages, Mortgage Banker, First Time Homebuyer, Homebuyer Tips, Housing Market, Buying a Home, Preapproval, Homebuyer, Mortgage Pre-Approvals, Buying Home During COVID-19, Mortgage for Millennials, Apex Approved