Being intentional and competitive are musts whenbuying a homethis season. Thats why pre-approval is so important today. Pre-approval from a lender is the only way to know your true price range and how much money you can borrow for your loan. Peter Warden, Editor ofThe Mortgage Reports,explains:
The lender will check out your personal finances and issue you a letter confirming the amount youre eligible to borrow. This not only gives you a firm budget for house hunting,but also lets sellers know youre qualified to make an offer.
Why does that matter so much today? There are many more buyers looking for homes today than there are homes available for sale, and thats creating some seriouscompetition. According to theNational Association of Realtors(NAR), the average home is getting4.8 offersper sale. As a result,bidding warsare still common.
Your pre-approval gives you a leg up in these situations. Thats because you know exactly what youre approved to borrow before you write your offer, and it lets the seller know youre qualified to buy their home. This helps both you and the seller feel confident in what youre bringing to the table. And that puts you in a better position to potentially win a bidding war.
As Warden puts it:
Theres another important reason to get pre-approved, too. And thats because there are way more buyers than homes in todays market which means you need to be ultra-prepared if you want to win a bidding war.Most sellers are getting multiple offers right now. And most wont even entertain an offer without a pre-approval letter included.
Every advantage you can gain as a buyer is crucial in a market thats constantly changing.Mortgage ratesare rising,home pricesare going up, and lending institutions are regularly updating their standards. Youre going to needguidanceto navigate these waters, so its important to have a team of professionals, such as a loan officer and a trusted Seven Gables advisor, on your side. Theyll help make sure youre ready to put your best foot forward.
Bottom Line
Getting pre-approved for a mortgage helps you better understand what you can afford and signals to sellers youre serious about purchasing their home. Connect with a Seven Gables advisor, so you have the tools you need to succeed as a homebuyer in todays market.
