Buying a home? Do this one thing first
Ready to buy a home? There’s one thing that will help you before you even begin the homebuying process. Yes, that’s right: Turn off HGTV. Reschedule your showings. Because this piece of documentation should be done before you even start the home-shopping process. We’re talking about getting a mortgage pre-approval.
Four benefits to getting a mortgage pre-approval
- Clarifies your home buying budget
- Demonstrates serious commitment to home sellers
- Gets you started on paperwork in advance
- Gives you security without committing you to borrow
You don’t want to go shopping for the most important purchase of your life without knowing how much you can spend, do you? With a mortgage pre-approval, we’ll review your credit history, income, debt situation, and employment history to determine your creditworthiness as a potential borrower. Then we’ll extend an offer to lend up to a specified amount for the purchase of your new home, subject to conditions clearly stated in the pre-approval letter.
Once you add your pre-approved maximum loan amount to the amount you plan to use for your down payment, you will know your home purchase price range. This will help guide you to the right listings because you will know exactly how much you can borrow when you’re ready to make an offer.
In case you hadn’t noticed, the market is hot right now. And that means that other would-be homebuyers are probably looking at the same properties you are — and possibly making an offer, as well. You want your offer to shine, and one way to do that is to show the seller that if they choose your offer, the transaction will proceed smoothly.
That’s what a mortgage pre-approval will do for you: The seller will see that Newfi is already committed to loaning you a certain amount, assuming your financial situation stays the same. That means the homeowner doesn’t have to fret that you are offering more than you can pay, causing the sale to fall through at the last minute and leaving them in a bind.
When the best properties are being snapped up shortly after they arrive on the market, homebuyers must do everything they can to position themselves as the “buyer of choice.”
Yes, you’re going to be collecting information and signing documents as you go through the process. The great news is that once you’ve received your mortgage pre-approval, you’re mostly good to go.
That means that when it comes time to actually buy your house, you’ve already completed this laborious task. Once we check your financial situation one more time (this isn’t the time to go crazy buying furniture!) you’ll be ready to close quickly on your new home once the offer is accepted.
And then you’ll be ready for the good stuff; yes, like finally choosing the perfect couch for your family room.
And don’t worry if you decide that you haven’t found the perfect house. A pre-approval doesn’t commit you to borrow or obligate you to close your loan with a particular lender.
Warning: Don’t be fooled by a “pre-qualification”
Some lenders might suggest that you get a “pre-qualification,” but that is not as solid as a pre-approval. With a pre-approval, we’ll take a deeper look into your finances, with an in-depth analysis that gives a far more accurate vision of your creditworthiness.
Think of it this way: Qualifying for something is easy, but actually being approved for something is more challenging.
Ready to get started with your pre-approval? Contact a Newfi Mortgage Advisor today at (888) 316-3934 or fill out our contact form. We’re standing by to give you a mortgage rate quote and help you with any aspect of getting started on the homebuying process. Whether you’ve bought before or are a first-time homebuyer, let us help you decipher the sometimes-confusing mortgage world and get you started on your path to home ownership today.