Why should you spend the time and energy getting a pre-approval before you see your FIRST home? Jeremey McHone explains what a pre-approval is and what the 2 major benefits are of getting one before you start looking at houses to buy.
Are you thinking about buying a home this year? First, you need to get pre-approved and here’s why.
Jeremy McHone with the Whissel Realty Group explains why you should get a pre-approval before looking at homes.
What is a pre-approval?
A pre-approval means you’ve met with a loan officer and they’ve actually collected documents from you and run your income and your debts, and created a mortgage approval for a certain amount. Now, the reason why you want to go through this upfront is that it takes some due diligence and they have some work on their back-end that they have to do in order to get that approval. You want to make sure that work’s done ahead of time, not while you’re in escrow.
Now, what are the two benefits of getting a pre-approval before you look at homes?
- The first one is that if you’re looking at homes and you haven’t received your pre-approval, you don’t really know what your budget is, so you might be looking at homes that you actually can’t afford, or you might be looking at homes that you don’t love and you can afford more and you don’t even know it. That’s why you want to establish that budget ahead of time. Most people, when they’re choosing a budget, they’re more concerned about their monthly payment then they are about the actual loan amount, and so you want to find out what that monthly payment is ahead of time so you know that you’ve set up a budget that you are comfortable with.
- The second, and possibly even more important reason is, right now we’re in a seller’s market. There’s low inventory. When houses go on the market, they’re getting sold very quickly. If you see a home that you absolutely love and you want to place an offer, that seller’s going to require pre-approval to accept that offer. In the time it takes you to get that pre-approval from your loan officer, that house might be gone and you might miss out on a house of your dreams because you didn’t do your due diligence ahead of time.
That’s why you want to make sure that you sit down with a loan officer and get your pre-approval before you do anything else in the home buying process. If you’d like to do that, I know some great lenders. Drop a comment below, or give me a call at 619-971-0791. I’d love to hook you up with a great lender, and sit down and go over everything with you.Search Homes For Sale in San Diego