Advantages Of A Pre-Approval

Often I am asked to show homes to prospective buyers that are unsure of the home buying process.  As I talk them through the steps of finding and buying the home of their dreams in Chandler, AZ, many are surprised that obtaining a pre-qualification is such an important part of the process.  Here are some of the important items that getting pre-qualified will help with.

Staying within budget

Getting pre-qualified can ensure you’re looking at homes that are within a price range that fits your budget and needs.  Not only will you save time by looking at homes that are attainable, it can also guide you to the neighborhood(s) that are within your budget, and it may prevent disappointment that can come from looking at houses outside of ones budget.  Sometimes, people are approved for more than they expected, meaning they can afford a bigger home, or a home in a nicer area than they previously thought they could.

Will your offer be accepted?

One of the first questions that comes up when an offer is submitted is, “Are they pre-qualified?”  A pre-qualification shows the sellers that you are serious and can afford to perform on the offer to purchase their home.  No seller wants to accept an offer and take their home off the market, only to have the sale fall through and have to realist their home.  Being pre-qualified can reduce the potential for the sale to go awry before closing.

What is a Pre-qualification?

Getting a pre-qualification is pretty simple for the average borrower.  You simply supply the lender with your financial picture, including debts, income, and assets.  After evaluating this information, a lender can give you an idea of how much mortgage you can qualify for.  A pre-qualification can be done over the phone or internet and there is typically no charge for it.  Because it is a quick procedure, and based only on the information you provide to the lender, your pre-qualified amount is an unofficial estimate on what you can afford.

The next step would be a pre-approval.  Getting a pre-approval simply consists of providing documentation for all of the asset/liability/income information you provided for your pre-qualification (paystubs/tax returns/bank statements).  After going over those items, the lender can then calculate an accurate amount that you will be eligible to borrow and issue you a letter to accompany your offer for a home purchase.

Where can I get pre-approved?

Many banks offer mortgages.  Sifting through all the different programs can be a daunting task.  Your real estate professional will have had experience with many different loan options.  Use this valuable resource to find a loan officer that has a great track record with successful closings.

What if I am not approved?

If you are not initially approved for a home loan, don’t get discouraged.  The right lender can put you on the path to living in your dream home, whether it is immediate, or in the near future.  He will help you come up with a credit repair plan (often you can raise your score very quickly with some easy steps) or a savings plan (for your down payment and closing costs), or just give you general advice to improve your chances of obtaining financing.  Call him to find out how close you are to buying your new home.

When you’re ready to start the home buying process call MT Real Estate to reduce the stress and guide you into your new home.  Don’t forget to ask about our rebate program where we give you money back at closing.

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