Key Takeaways:
- Getting pre-approved for a mortgage loan is the single easiest thing you can do to become a homeowner.
- With buyer demand greater than housing supply, knowing how much you are pre-approved to borrow is critical to stand out and be competitive.
- Contact our team today to simplify the experience of your homeownership journey!
Gain a Competitive Advantage
With today’s competitive housing market driving offers well above their asking price, it’s understandable that some may see this trend and be too intimidated to enter the housing market. But the good news is that there’s no reason to be! Once prospective homebuyers know how much they are pre-approved for before beginning their journey, buying a home becomes more straightforward and less stressful. So let’s look at why obtaining your pre-approval is the best first step you can take to become a homeowner.
Knowing is half the battle
Getting pre-approval from a lender is the only way to understand your actual price range and how much money you can borrow for your mortgage loan. Because of this, it’s the first thing you need to do. Knowing this, you’ll better understand what you can realistically afford, making buying a home a lot easier. As Peter Warden, Editor of The Mortgage Reports, explains:
“The lender will check out your personal finances and issue you a letter confirming the amount you’re eligible to borrow. This not only gives you a firm budget for house hunting, but also lets sellers know you’re qualified to make an offer.”
Because there is currently a historical imbalance in housing supply and demand in the US, the real estate market has become increasingly competitive. As a result, more people are looking for homes today than there are available homes. According to the National Association of Realtors (NAR), the average home gets 4.8 offers per sale. Consequently, intense bidding wars have become commonplace.
Pre-approval gets you noticed
Pre-approval gives you a leg up in these situations because you will know exactly how much money you’re approved to borrow before you write your offer. Additionally, pre-approval lets the seller know that you’re qualified to buy their home, which helps you and the seller feel confident in your proposal. And that puts you in a better position to potentially win a bidding war.
As Warden puts it:
“There’s another important reason to get pre-approved, too. And that’s because there are way more buyers than homes in today’s 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 won’t even entertain an offer without a pre-approval letter included.”
Every advantage you can gain as a buyer is crucial in a hot housing market like we have today. Mortgage interest rates are rising, home prices are going up, and with lending institutions regularly updating their standards, you will need guidance to navigate these waters successfully. So it’s essential to have a team of professionals, such as a loan officer and a trusted real estate agent, to ensure that you are ready to make an offer when you find your dream house.
Get Your Buying Power Today
Getting pre-approved for a mortgage helps you better understand what you can afford, which neighborhoods are ideal, and signals to sellers that you’re serious about purchasing their home. So let’s connect to make sure that you have all of the tools you need to succeed as a homebuyer in today’s competitive market!