Why You Need to Be Pre-Approved Before You Make an Offer On Your Dream Home

One of the biggest mistakes a new homebuyer can make is to wait until they find their new house to be pre-approved for a mortgage. It’s an easy error. It seems like something that comes at the end of the process, and you have enough to worry about while you’re still searching for a new home. They might even go so far as to get pre-qualified for a mortgage beforehand, but not pre-approved. However, as easy as this mistake is to make, it could be costly in the end. It might even cost you your dream home.

Pre-Qualified is Not Pre-Approved

Pre-qualification is just the first step in the mortgage process. This is the first consultation with the bank discussing your finances and giving you a general idea of the mortgages for which you may be qualified. It’s also not as thorough as a the pre-approval process. Most pre-qualification analysis does not look into your credit report, which will factor highly into your likelihood to be approved for a mortgage.

Pre-approval, on the other hand, is more in depth. You have to officially apply for the mortgage and provide proof of your financials and credit rating. After that’s done, your lender can tell you more specifically what they should be able to offer in terms of a mortgage: your interest rate and a conditional written agreement specifying the amount of mortgage for which you’re approved. The number you see in your pre-approval may differ from the number you expected after your pre-qualification, so it’s important not to make any decisions until you’re pre-approved.

Your Pre-Approval Letter Determines Your Budget

Once you’ve received your pre-approval, you know what price range you’re looking for. You can give your realtor that information to help you find a home within your budget. While you might be able to determine an estimated budget before you’re pre-approved, it’s not recommended. The last thing you want is to make an offer on the house you’ve fallen in love with, wait for financing to come back only to find out that you don’t have enough money. If you’re pre-approved already, you know exactly what to expect from the beginning.

Pre-Approval Gives You An Edge With Your Offer

Pre-approval makes a great impression on the seller, as it allows them to see that you’re serious and you have all your ducks in a row. It also gives you an advantage with your offer with respect to time. Waiting for financing to come through can hold up the application process, and if the seller has another potential buyer who is already financed, it’s just good sense to give the house to the latter.

As with anything else, it’s better to go in prepared. Make sure you have all the information you need about financing, and pass that information along to your Brazos Valley realtor, so she can use it to help you find the home of your dreams. 

Home For Sale in College Station

Sarah Miller, your RE/MAX realtor bryan-college station can help you discover a lot of great tips for making a profitable sale of your home. Call Sarah Miller at 979-255-1904 for your real estate needs in Bryan-College Station and the entire Brazos Valley!