Buying a new home is an exciting time in your life. After all, it is probably the most expensive purchase you will probably make in your lifetime, and you want to do it right. You will spend many hours looking for just the right property, in the right neighbourhood, that is close to all the amenities that are most important to you. The last thing you want is to find out that the deal has fallen through because you cannot afford it because you were not able to qualify for financing. The best solution is to get pre-approved first, and buying a home will be a much smoother process.
Know What You Can Comfortably Afford
If you apply for a pre-approved mortgage before you start looking for your new home, you will be able to focus on properties that fit your price range. A lender will offer you a guaranteed rate for financing based on your situation for a specific period. You will be able to shop for your home during this time (usually 90-120 days, depending on the lender), knowing how much you will be able to borrow and how much you will be paying for your mortgage.
Working with a Realtor
If you know what you can comfortably afford, you can present your realtor with your list of features that are “must haves” for your home, as well as those which would be “nice to have.” Your realtor will also need to know the price range for the properties you can afford to save both of you time on your search for the perfect home.
Pre-approval Can Make Buying a Home Easier
Once you get to the stage where you find a home and you make an offer, you may not be the only purchaser who is interested in the property. If you have your financing firmly in place, your offer may be more likely to be accepted than one which is conditional on the purchaser arranging financing. Keep in mind that you will want to make it easy for the owner to accept your offer.
Take the time to get pre-approved before you start house-hunting. It will make the whole process run a lot smoother and you can focus on finding a home to call your own.