The Importance of Pre-Approval Before Home Shopping
Updated: Oct 24, 2019
You’ve been thinking about it, dreaming about it, talking about it, preparing for it… And now you are ready… You have decided you want to purchase your first home!
What an exciting and overwhelming adventure. You might be wondering, though, “Where do I begin?”
There are many things you need to think about when purchasing your first home. The biggest of them being, “What can I afford?”
Many seasoned home buyers recommend that you are pre-approved for a mortgage first. The reason you want pre-approval is that you don’t want to begin your home search looking for houses you cannot afford, only to find the perfect home for you, and when you go to the bank you find out that they cannot approve you for that high of a mortgage. Talk about DISAPPOINTING!
Another reason to get pre-approved is that many agents won't show homes to clients that are not pre-approved. When you do finally find your dream home, if you go in to make an offer, and someone else makes the exact same offer, and they are already pre-approved and you are not, the majority of the time, the seller will choose the person who is already approved for a mortgage because they can close on the house much quicker.
Once you are approved for a mortgage, you need to have an honest conversation with yourself. You need to make a budget and look at what you can realistically pay each month for your mortgage payment. A big trap first time home buyers fall into is not realizing that on top of the mortgage payment, they have to pay all their utilities, insurance, property taxes, replacement costs when things break (trust me, they will), and things they might need now that they did not need before, like a lawnmower and pressure washer.