There are three reasons to get pre-approved for a mortgage before you shop for a home:
- You’ll know what you can afford. People will come to me wanting to look at homes in a certain price range and then proceed to get pre-approved. Many times, these buyers end up qualifying for more than they thought and have more options for buying a home. You won’t have to cap yourself because you’ll know what you can afford.
- You won’t know what interest rates will be until you lock them in. If you look for a home first and then get pre-approved, you won’t have a good idea of what your payment is. You might find out that payments are more than you can afford on a monthly basis, and we have to reduce the purchase price. Interest affects more than just the price, so you want to lock in your rate before shopping.“Getting pre-approved tells toy exactly what you can afford.”
- You can provide the seller with the pre-approval letter. This is huge if you find yourself up against other offers. If you don’t have a pre-approval letter and the offer you’re competing against does, the seller will most likely go with the offer with the pre-approval. Why? All the lender information is there to verify that the buyer has the necessary funds. Sometimes sellers who go under contract with buyers who aren’t pre-approved will cancel the deal within a week when they find out about their pre-approval status.
Don’t underestimate any of these three points about getting pre-approved for a loan before you look at homes. If you have any questions about the pre-approval process or you’re thinking about buying a home in Sacramento, give us a call or send us an email. We’d be happy to help!