You know that old adage “What came first? The Chicken or the Egg?” Well, I don’t know the answer to that…But I do know that getting pre-approved with a mortgage lender comes before looking at homes!
Yes, even just that one home you really like but just want to see! Why is it so important to be pre-approved before you look at homes? Here are 3 great reasons to consult a loan specialist:
Reason 1: Courtesy to Sellers
Most of the homes on the market are occupied. When a Seller is made aware of a showing, they take quite a bit of time to make sure the home is clean and prepared for showing. This can mean getting multiple kids to clean rooms, temporarily relocating, putting pets in kennels, and preparing for short notice showings at any date or time. To be fair to Sellers, it is the Agents’ job to do their due diligence and confirm the prospective Buyer is pre-approved for a loan and is in the price range of the listed home.
But what about you, the Buyer, how does being pre-approved first benefit you?
There are two more very important reasons for the Buyer to be pre-approved for a loan before you start looking at homes:
Reason 2: Your Budget
There is nothing more heartbreaking than finding the perfect home, only to find out that the home is out of your budgeted price range. The only way you can make sure you do not exceed your budgeted monthly house note is to be sure that the price range we are looking in is within the range your lender suggests. Getting pre-approved will eliminate this issue! When your lender pre-approves you, they will let you know what price range to stay within to ensure your budget is not exceeded.
Reason 3: Type of Loan
Your agent will need to know the type of loan you are pre-qualified for! Not all homes will qualify for all loan types. For example, FHA, VA and RD (Rural Development) home loans have guidelines that the home must stay within for the lender to approve the loan.
Yes, sometimes the “home” must “qualify” for financing as well! Part of the loan process will require an appraiser to “appraise” the home for a specific value. The appraiser will notify the bank if they find any issues that “disqualify” the home for your loan type. If the Seller cannot make the necessary repairs, the loan will not be approved. It is the Agents’ job to notify you of any issues they see in your home-buying process which may cause a problem with final loan approval. We want to help you avoid costs for a house you won’t be able to buy!
Bottom Line: Take It from The Professionals
Prospective Buyers often think the lender expects them to have a home chosen prior to speaking to them about a loan. This is not the case! It is the Real Estate Agents’ responsibility to make sure you are searching within your budgeted price range and will meet the lender’s criteria.
It’s as easy as 1,2,3!
- Call a lender and let them know what you have budgeted for a monthly house note.
- Find out what loan type you will be working with in consultation with your lender
- You and your Agent can be confident that the homes you are looking at will qualify for financing and stay in your preferred budget!
P.S: Need a list of Lenders? Call me at 985-226-3337 and I will be happy to send you a list of Lenders that can assist you through the Pre-Qualification Process!