Meeting with a Mortgage Broker and obtaining a Pre-Approval Letter is a crucial step in getting started with the home-buying process.
Why do you need to be pre-approved before looking at homes?
- Neither you nor the Realtor want to waste time looking at properties that aren’t within your budget. You don’t want to assume you will be approved for a certain amount and find out later that your dream home is out of your budget.
- It is critical to have a pre-approval letter to negotiate effectively. A buyer who has a pre-approval has a distinct advantage over those buyers who decide to look at homes without a pre-approval. If a seller receives multiple offers on their home, which is pretty common in a sellers market, they are going to select a purchase offer from the buyer who provides a pre-approval.
- You will eliminate frustration and stress by obtaining your pre-approval beforehand: giving you an upper-hand in today’s competitive market.
VERY IMPORTANT: What you are qualified to pay versus what you are comfortable paying for a monthly mortgage payment may be two different numbers. You can often be approved for a much larger monthly payment than what you will actually be comfortable paying each month- this is something to discuss with your lender or your Realtor. A good Realtor will respect those boundaries regardless of what the numbers say you can afford. Do not let anyone convince you to look “just a little bit higher”.