You’ve decided it’s time to buy your own home. You are tired of renting. And that’s a good thing. You have down payment money saved up, and now you decide it’s time to go look at homes.
Before you even think about looking at a home you need to take one very important step. What’s that you ask? Simple. It’s called getting a pre-approval from a mortgage company.
So what is the pre-approval, and why is it important?
When you get a pre-approval from a mortgage company, the mortgage professional will ask you a number of questions. The questions will be based upon your income and your outstanding debt. The loan officer will run your credit, and after a 5 or 10 minute conversation, he or she can give you a very good idea of exactly how much you can afford to pay for a new home. This process will take into account estimated taxes, and if it’s a condo or townhouse, any association fees.
So why is this important? When you finally get your approval from the loan officer, you will know what price range you need to be looking in. If you can only get a mortgage and purchase a house that’s worth $300,000, why would you look at houses for 400,000? So this will put you into the proper price range for what you can actually afford to purchase. You don’t need to spend all that much, if the Loan Officer says you are good for a purchase up to $400,000, but you only feel comfortable buying a home for $300,000, that’s okay. At least you know you can do it.
The other part of the equation is that when you find the home that you’re interested in purchasing,then along with your Realtor you will prepare an offer to the seller. The seller will want to see a copy of the pre-approval. Look at it this way, if you were the seller and someone wanted by your house would you be interested in knowing if they actually are able to get the financing necessary to purchase your home? Of course you would. So, the very first step you need to take when you’re ready to purchase a home, is to get a pre-approval. If you know a good mortgage representative, give them a call. It only takes a few minutes and there is no cost involved at this time. And if you don’t know someone, call us. We can recommend a number of good Professionals for you.