Are you getting ready to buy a new home?
One of the most important steps in the home buying process is obtaining financing. As a buyer, you have to know for certain which type of mortgage best suits your needs. In order to determine that, you need to get pre-approved for a mortgage.
Many buyers don’t understand why getting a pre-approval is important. The truth is, if you don’t get a loan pre-approval before you start looking for Charlottesville homes for sale, you might actually prevent yourself from finding—and buying – your dream home.
Pre-qualification Vs. Pre-approval
There are some people who think that a pre-approval and a pre-qualification are one and the same. There is actually a world of difference. You need to understand the difference between being pre-qualified and pre-approved.
A pre-qualification is the initial step and the entire process is informal. To prequalify for a mortgage, you have to meet with a lender and provide information about your assets, income, and liabilities. The lender will give you a rough estimate of how much money you can borrow based on the information you have given.
A mortgage pre-approval, on the other hand, is when a lender gives their written commitment to a potential borrower. With a pre-approval, the lender checks your credit and verifies your financial and employment information and documentation.
With a pre-approval letter from your lender, real estate agents and sellers know you are a serious buyer. Your pre-approval letter proves that you already have the backing and the ability to go through with the sale, making you a much more attractive buyer to sellers.
Below are several reasons you will be glad you obtained a pre-approval for a mortgage before looking for homes for sale in Charlottesville VA:
1. It pinpoints a price range
With a mortgage pre-approval, you will learn how large a loan you would qualify for based on your financial history. You don’t have to waste your time looking at properties that are beyond your price range.
It also narrows down the neighborhoods you should consider. When you know your budget, you also know what areas you can afford. This way, you can find your dream home much faster.
2. It results in a higher acceptance rate
Sellers are less willing to accept offers from a buyer without a pre-approval. They don’t like it if they need to wait for a buyer to get approved for a mortgage before a serious offer can be made or accepted.
Sellers appreciate buyers who have been pre-approved because they can start negotiating right away. In addition, they may be more willing to lower the asking price, cover closing costs, or make adjustments to work with a pre-approved buyer.
3. It speeds up the process
If you aren’t pre-approved, you’ll spend more time looking for homes. You may get turned down once you’re ready to make an offer.
With a pre-approval, you have less to worry about. You’ll have fewer major hurdles to overcome.
Let me help you find your dream home!
Call me, Pam Dent, at 434-960-0161. I’m committed to helping you become a successful home buyer in Charlottesville VA!