steps to getting a mortgage loan
4 REASONS YOU NEED A PRE-QUALIFICATION LETTER BEFORE SHOPPING FOR A HOME
Posted by New Home Resource on February 8, 2016 in
Yes – you really do need to seek advice on this topic. Why? Because it’s one thing to decide you need to find a new home for your family’s needs. It’s quite another to know how much home you’re actually qualified to buy. So before you start house-hunting online and looking at pretty house pictures, and before you give your favorite New Home Resource Realtor® a call. . . you should do one very important thing first:
Contact a mortgage lender to find out how much home you’re qualified to purchase.
And here are four very good reasons this should be the very FIRST step you take.
1) DON’T FALL IN LOVE – ONLY TO GET DUMPED!
Few things are worse than falling in love with “the perfect home” – only to discover that you can’t afford it. It’s a huge emotional let-down. For one thing, every home you look at after this will be compared to ‘the-one-that-got-away.’ So partly, by not knowing your buying parameters, you’ve set yourself up for disappointment at the very time when excitement and enthusiasm should be happening! Also, by aiming higher than you can afford – even if it happens unintentionally – let’s face it, can be a blow to your ego (whether you blame yourself or it’s just your ego taking a hit). But having the facts available about your financial capabilities before you begin shopping is the best way to avoid all of these (rather unpleasant) circumstances.
2) HOW MUCH MONEY DOES IT COST TO BUY A HOUSE ANYWAY?
The required down payment can vary greatly from loan type to loan type, your personal income, and your credit history. This is something you absolutely need – and want – to know before you dive into this project. Do you have enough money saved? PLUS – in addition to your required down payment, there are closing costs and expenses added to the bottom line that can equate to several thousand dollars more at the closing table. To greatly minimize these closing expenses, visit the “No Fee” lender at http://www.premiermortgagelending.com/
3) YOUR REALTOR® IS A PERSON TOO!
When you’re in the process of buying a home, it might seem like everyone is out to get something from you. But in reality, there is one person who is required both ethically and legally to put your best interests first: Your professional Realtor®. Of course, others you meet throughout the process may also choose to function that way. But for your real estate professional, it’s not an option (and truth be told, we prefer it that way).
That being said, you should also remember one very important thing: Your Realtor® is a person, too. Actually, we know you know that (in theory, at least) – but let us explain why it matters in this context.
Most real estate professionals are more than happy to go above and beyond on your behalf, and if you think about all the service they bring to the table, that can mean a lot. Doing extensive research to find properties in your preferred neighborhood, style, price range; with the right schools or proximity to your work. Getting all the property background and communicating with the seller and their agent to secure appointments – all that happens before even taking you to view it. It’s a lot of work up-front on your Realtor’s part – but this is what they do. You’re their client and they’re happy to do it because helping you make the right choice is the best part of their job.
But if you’re home shopping without knowing what your budget will allow you to buy – your Realtor® is going to expend a lot of unnecessary time and energy doing all those functions for properties that are literally just not an option for you. (And this is where the “person” part comes in.)
Just like anyone else, your Realtor® has limited and valuable time, energy, and resources. So you need to make sure that you don’t burn them out by using up those resources on homes that are outside your reach. Because if you do, there’s that much less of everything to devote to finding the right home that fits all your needs – and your budget – too.
4) SOMEONE ELSE WANTS MY HOUSE!
These days, it’s not as easy as viewing a home, making an offer, and opening escrow. Often, sellers have several buyers interested in their home at the same time, and they are able to pick and choose the buyer they want. Who they choose (assuming the sales price is a constant) will many times depend on which buyer can get to the closing table the fastest – and with the best terms.
Getting pre-approved and knowing exactly how much house you can afford before shopping for a home is key to winning-over a home-seller. Be the buyer who is prepared.
By having a pre-qualification letter from a mortgage lender in-hand, the seller knows you’re not only serious about buying, but you also have a good chance of getting to a successful closing. Even better, start taking the steps NOW to begin the pre-approval loan process. Given a choice, sellers will choose the “pre-approved” buyer over the “pre-qualified” buyer, any day.
What’s the difference between a pre-qualification letter and a pre-approval letter? It’s a HUGE difference!! (Click on this link to find out: “What are the steps to getting a mortgage loan”)
A pre-qualification letter is not a commitment from a lender to make your loan. In fact, it doesn’t include necessary information about their costs or their interest rate, either. Any reputable real estate professional will always recommend you start the formal loan process now, as opposed to just being pre-qualified. For more information about just how important this step is, we refer you to this article from Las Vegas-based Premier Mortgage Lending.
While most people are used to finding the right home and then seeking a mortgage loan – by turning those steps around and beginning the documentation process with your lender first, you can speed up the process considerably. Getting many of the necessary documents to your lender early and becoming a pre-approved buyer can ultimately put your offer at the front of the line! You become the best buyer, in the right place, at the right time – and BINGO! That house is yours.
New Home Resource helps current and future homeowners with all of their Las Vegas real estate needs. Whether your preference is for a newly-built home from a local builder, or a resale property in just the right location, a New Home Resource Realtor® is here to find the perfect property for you. Please contact a New Home Resource Realtor® today at 702-365-1000 or at www.newhomeresource.com. Broker Joanna Piette, and agents Denise Moreno Thrasher, Jessica O’Brien, Evelyn ‘Beng’ Kern, Lance Partin and Kathy Paterniti are all here to help!