Importance of Pre-Approval When Buying a Home
Are you getting ready to buy your first home? Or are you looking to downsize? In either case, the first step you should take in the home buying process is to get pre-approved for a mortgage.
According to a survey from realtor.com, 48 percent of potential homebuyers are making the mistake of skipping the pre-approval step in the home buying process. If nearly half of homebuyers choose to skip this step, you may be wondering if it’s worth it to get your finances in order before you start house hunting?
In a word, yes – and here are the reasons why mortgage pre-approval is important when purchasing a home in today’s market:
You have more buying power. When you have approval from a lender, both real estate agents and sellers view you as a serious buyer. Having pre-approval shows that you are financially prepared to purchase and, if your offer is accepted, there will be no hold-ups in securing your mortgage. Sellers want this assurance with their potential buyers, especially in a seller’s market. And in the event of a likely bidding war, you’ll want the advantage of a pre-approval.
You’ll save valuable time. Pre-approval not only strengthens your case as a serious buyer but also provides your maximum price range. By knowing how much home you can afford, you can target your search on homes in your price range and not waste time looking at houses you can’t afford. You’ll also be able to focus on the home’s features rather than worrying about the price.
You’ll have room to negotiate. Besides making you an attractive buyer, a pre-approval gives you flexibility when it comes to negotiations. Your pre-approval strengthens your position as a buyer, allowing you to negotiate home improvement and repair costs or asking the seller to help cover closing costs. If a seller knows you are already qualified to purchase their home, they may be willing to compromise or bargain to ensure a sale.
You’ll close on your home faster. The average home closing takes about 50 days. A mortgage pre-approval can help speed up the closing process as your financial information is on file and financing is already secured. You can move quickly to the home appraisal and inspection process. If the seller is trying to close sooner than later, a pre-approval can work to your advantage.
The first step in getting pre-approved is to create an account. You’ll need to submit documentation of your financial history including income, assets, and debts. This documentation can include but is not limited to:
W-2 statements
Bank statements
Retirement statements
Credit report
Tax returns (past two years)
Proof of residence
Self-employment documents
Once you submit your documentation, we’ll review it and let you know if you qualify for a loan. If you qualify, we’ll provide you with a preapproval letter with the maximum amount you’re qualified to borrow.
Getting pre-approved for a mortgage is easy when you partner with Pacor Mortgage! Pacor Mortgage is your best resource when it comes to mortgage financing. For 35 years, our expert real estate team has helped homeowners like you navigate the challenging and constantly changing real estate market. Visit our website to create your account and apply for your loan in as little as 15 minutes.
