Why You Must Get Pre-Approved Before Buying a House
If you want to buy a house, I cannot stress how important it is to get pre-approved before you do anything else. It is the absolute most important thing you need to do. I don’t care how much your sister or your friend or your great aunt Carol told you you can afford because the truth is, only a mortgage lender can tell you that. So unless you can buy a house with 100% cash, you will need to get pre-approved first.
Here are 3 reasons why getting pre-approved is so important:
Your dreams can get crushed. You need to know exactly how much you can afford. All those months spent window shopping on Zillow for your dream house can quickly come to an end once you realize you can’t actually afford it. Why waste time looking at houses you can’t afford? If it turns out that you can’t afford the type of house you really want, then at least you know. Now you know what you need to do to get there and you can use it as a learning experience to push you one step closer to getting your dream house.
You may be pleasantly surprised at how much you can actually afford. You may think you can only afford a certain amount when in reality, you can afford more. In order to get pre-approved, lenders will look at your income, credit history, debt-to-income ratio and down payment amount. Based on those factors, they can determine how much you can afford and how much they are willing to let you borrow. But every situation is unique. For example, you may be able to afford a more expensive house if the property taxes are lower. It all comes down to your monthly payment amount and property taxes can significantly alter that. Interest rates can also affect your monthly payment, so that will affect how much you can afford. Speaking to a mortgage lender will give you peace of mind and prepare you for one of the biggest purchases of your life.
You can’t buy a house without being pre-approved. Plain and simple— you cannot submit an offer on a house without a pre-approval letter (unless it’s a full cash offer). Offers and pre-approval letters go together like peanut butter and jelly— you just can’t have one without the other. A real estate agent would never submit your offer without one. In fact, they likely will not waste their time showing you houses in the first place without asking for a pre-approval letter first.
Buying a house should be fun and exciting. Even though it can be a little scary, it’s a huge milestone in life. Depending on who you work with, getting pre-approved can take less than a day. As long as you have all the documents needed such as tax returns, pay stubs, bank statements, etc., you can be pre-approved in a few hours. Why wouldn’t you want to be as prepared as possible for such a huge investment?
If you need recommendations for mortgage lenders or have any questions about buying a house, let me know here.