It is no secret that getting pre-approved before you begin shopping for a home is highly suggested by industry experts. This is true regardless of whether you are a first time homebuyer, or an experienced one. So when you decide it is time to buy a home in Fredericksburg, there are decisive benefits to getting pre-approved, but these benefits are even more pronounced the less experienced you are as a home buyer.
Getting pre-approved in the most basic form means you have consulted with a lender/loan officer, and they have deemed you capable of buying a home. The process entails the lender looking at your credit history, income, assets, expenses, work history, debto to income ratio and more. This is the first step of the process of obtaining a mortgage, at the conclusion of which, the lender will issue a pre-approval letter. This letter serves many purposes that will come into play as you proceed down the path to buy a home in Fredericksburg.
The act of getting pre-approved can be accomplished in many ways, but results at some point in having a conversation with the lender. The process is often initiated by that conversation, but can also be initiated by completing an application on the lender or real estate agent’s website. Either way, the lender will want to accomplish the completion of a mortgage application as part of the process.
The time to get pre-approved for a mortgage is before you begin the process of visiting prospective properties. You make the decision to buy a home in Fredericksburg, the very next step should be getting pre-approved. Many times a buyer waits until later in the process, and there are certainly ramifications to doing that.
So, let’s focus on the why of getting pre-approved. It is a common belief that real estate agents want buyers to get pre-approved so that the agent knows they aren’t wasting time showing properties to that buyer. There is an element of truth to that theory. But, the much larger reasons are ALL for the benefit of the buyer.
The pre-approval process is designed to be much more than an assurance to the agent that you are a qualified buyer. The process also educates the buyer as to the potential loan products available to them. It helps them understand the parameters of the various loan products. For instance, perhaps you are looking to obtain 100% financing, meaning you put no money as a down payment. A loan product that could be an option is a USDA loan, during your consultation with the lender, you learn the geographic parameters of using that particular loan program.
Another very important benefit is that during the pre-approval process you should obtain an estimate of the monthly payment for mortgages in your estimate price range. NOW is the time to learn the payment, not once you are standing in the family room of a home you have fallen in love with.
Knowing this information is critically important to your real estate agent in determining the homes they should show you, but also in negotiating the things that are important, or even necessary to you.
Once you successfully complete the pre-approval process, you are ready to embark on your journey to buy a home in Fredericksburg. The process is likely to be much more enjoyable, and your agent is much better equipped to negotiate on your behalf.
If you haven’t done so, check out the conversation in the video above. In this episode of Inside Real Estate we discuss the importance of getting pre-approved before you embark on your journey to buy a home in Fredericksburg, and the pitfalls of not doing so. Then begin searching for your next home. Happy house hunting.