In a real estate climate where things can change quickly, one way to be prepared for the home you’re planning to buy is to be pre-approved for a mortgage.
What does this mean?
It means you will go into a real estate transaction knowing what your budget is, knowing what homes are worth looking at because they match your criteria, and knowing you’ll likely be able to put a serious offer on the table on short notice if needed. It also means knowing that pre-approval is not a mortgage contract. It is a guideline, not a guarantee.
And it’s a wise move. In addition to that fiscal clarity, it’s wise because being pre-approved — also called pre-authorized — tells the seller how serious you are, which in turn could make the seller more serious about considering your offer, especially if there are multiple offers to consider.
You can shop around for a lender or mortgage broker to provide pre-approval. It usually lasts three or four months and all your ducks (or documents) will be in order in advance of making an offer. The lender will have researched your assets, liabilities, credit score, credit history, employment history, etc., in advance so that once you make an offer, the home you want will be appraised and compared to your financial situation. In many cases, that could be a simple step because of the pre-approval.
And what’s even more important now, you should be able to lock in the interest rate for the length of your pre-approval.
The process can take days. Better to be ready in advance and not be scrambling when you’re ready to make an offer, right?
For more information on the pre-approval process, call Jennifer (604-726-8768) and Dale (604-720-3353).