Should you get pre-approved for a mortgage loan?
We don’t get much practice thinking about the cost of homes throughout our day-to-day lives. You probably know how much you could reasonably spend on a night out or a spontaneous vacation. Some quick back-of-the-napkin calculations can provide you with a reasonable budget for most daily expenses. But when it comes to home prices, they aren’t in the same category. Visualize $200,000. Now visualize $450,000. Chances are good that your visualization didn’t change very much.
These differences are conceivable when they get down to the monthly payment. A $200,000 mortgage might mean a $950 monthly payment. The $450,000 mortgage, on the other hand, would mean nearly $2,000 in monthly payments. That’s a difference you can visualize!
Getting help with making those numbers real is just one of the many reasons your first step in the home-buying process should be mortgage pre-qualification. Before you start looking for houses, contact an agent or pack a single box, sit down with a mortgage consultant.
Here are three other reasons why your first call should be to a mortgage specialist.
A mortgage consultant can help you set your budget
Tapping through real estate apps can produce two negative consequences. First, you might panic about the price of real estate in your area. Seeing home prices significantly higher than you expected can lead to sticker shock. You might immediately scale back what you think you can afford. Flash forward two months after you’ve settled for something less sizable because you thought it was more “affordable,” and you may realize the 400-square-foot studio you’re sharing with your partner and two children is feeling cramped.
The other side of looking through those apps is the likelihood of falling in love with a house you really can’t afford. You might find the perfect place with a beautifully manicured lawn, a spacious living room, a professional-quality kitchen, and hardwood floors. You begin to daydream about what life would be like living in this place. Then you consult a mortgage professional and learn that this dream house is way out of your price range.
You can avoid both of these scenarios by speaking to a lender first. Based on your credit history, your income, and several other factors, you’ll get an upper limit for your future mortgage. This will give you an idea of how much house you can afford, and make sure you match your budget with a house that will fit your needs.
Pre-qualification gives you leverage with a seller
If you’ve ever sold a house, you know it’s an endless struggle. There are always a million things that need to be done, and there’s never enough time to do them all. People who are actively engaged in selling their homes don’t have time to fool around with people who are not totally serious about getting into a new home.
Getting pre-qualified for a mortgage shows that you’re serious. Not only does it demonstrate your intention to buy a house, but it also shows buyers that you can afford the offer you’re making. In fact, most buyers will not accept offers that don’t come with a home loan pre-qualification.
A preapproval letter is the key to showing agents and sellers you’re worth the effort. It shows them you’ve got your ducks in a row and you’re ready to make a deal. Speaking to a mortgage expert will get you through the door with many of the professionals you need to deal with in order to buy a house.
Abri’s mortgage team provides superior service and advice you can trust. We know a mortgage is one of the biggest investments you will make in your lifetime, so it’s important to work with a lender you trust. To speak with one of our Mortgage Experts call 866-469-6228 or email firstname.lastname@example.org.
Pre-qualification can find little problems before they get big
The formula for home loan approval is incredibly complicated. While your salary and credit score are important factors in determining how much house you can afford, there are numerous other considerations. For example, your mortgage approval could be affected by a recent job change or an unpaid medical bill. The pre-qualification process finds these snags.
After sitting down with a mortgage professional, you’ll have a better idea of what factors are limiting your home-buying budget. If you haven’t had your current job very long, it may make sense to wait a few months before buying to get approved for a larger loan. If there are errors or inaccuracies on your credit score, the pre-qualification process will bring those to light.
By putting financing at the beginning of your home-buying journey, you can ensure you have the time to resolve these problems. Since the only people involved in the conversation are you and your mortgage expert, there’s no risk of embarrassment. If you wait until you’re in talks with a seller before noticing these problems, you risk having your offer rejected by a nervous seller or agent.
At some point, you’re going to need to get approved for a mortgage. There’s no reason to wait until after you’ve picked out your dream home. If you wait, you may be setting yourself up for heartbreak and regret if you fall in love with a home you can’t afford. Conversely, you may settle for less than you want because you didn’t know your price range. Avoid both of these nightmares by speaking with a mortgage professional today! Abri’s Mortgage Team is ready to help. Whether you need a pre-approval, mortgage loan, want to refinance, or simply want to speak to a mortgage expert, our team is here to help. Email email@example.com , Call 866-469-6228, or make an appointment online and we’ll help you get started!