When the number of buyers in the housing market outnumbers the number of homes for sale, it’s called a “seller’s market.” The advantage tips toward the seller when the home is priced at or near market value, and as low inventory heats up, so too does the competition among those searching for a place to call their own. This can create multiple offer scenarios and bidding wars, making it tough for buyers to land their dream homes, unless they are coming in a with a big wad of cash. When financing your home purchase, here are three reasons why pre-approval should be your first step in the buying process:
- Gain A Competitive Advantage. Low inventory, like we have today, means homebuyers need every advantage they can get to make a strong impression and close the deal. One of the best ways to get one step ahead of other buyers is to get pre-approved for a mortgage before you make an offer. For one, it shows the sellers you’re serious about buying a home, which is always a plus in your corner. In addition, having pre-approval from a LOCAL lender that the we know and trust, and that the listing agent recognizes, may give you a huge advantage over the competition. Sellers and their Realtors tend to look more favorably on experienced lenders we know over online “quickie” loans.
- Accelerate the Home Buying Process. Pre-approval can also speed up the home buying process, so you can move faster when you’re ready to make an offer. In a competitive arena like we have today, being ready to put your best foot forward when the time comes may be the leg-up you need to cross the finish line first and land the home of your dreams.
- Know What You Are Qualified to Borrow. When you have provided all of the essential information to get pre-approved by a local lender, you also have a better sense of your budget, what you can afford, and ultimately how much you’re eligible to borrow for your mortgage. Ultimately, you’re less apt to have your heart set on a home that may be out of your reach.
If you are preparing to purchase a home in the near future, we are happy to refer you with a highly skilled and knowledgeable loan officer to get you moving in the right direction. The loan officer will pre-approve you based on the following criteria, also know as “The 4 C’s”:
- Capacity: Your current and future ability to make your payments
- Capital or Cash Reserves: The money, savings, and investments you have that can be sold quickly for cash
- Collateral: The home, or type of home, that you would like to purchase
- Credit: Your history of paying bills and other debts on time
While there are still many additional steps you’ll need to take in the home buying process, it’s clear why pre-approval is always the best place to begin. It’s your chance to gain the competitive edge you may need if you’re serious about owning a home. Let’s get together today to make sure you’re on the fastest path to homeownership. Call me at 775-233-0682 to get started.