If you’re like most people, you’ve probably heard that getting pre-approved for a mortgage loan is the first step in the homebuying process. But do you know why this is so important?
It’s so easy to fall in love with a home that is outside your budget when you start looking for a property to buy. That home then becomes the benchmark, and you compare other homes to that one.
You’ll agree that it makes sense know your price range, before you start house-hunting. Then you’ll be comfortable with your monthly payments and there is less chance of any surprises later. You can get a pre-approval letter from the mortgage department at your bank, or perhaps you already know and trust a mortgage loan consultant. If not, ask me to put you in contact with a really smart mortgage consultant who has helped many of my buyer clients.
According to a recent survey from realtor.com a lot of buyers are making the mistake of NOT getting pre-approved at the start of the homebuying process:
“Of over 2,000 active home shoppers who plan to purchase a home in the next 12 months, only 52% obtained a pre-approval letter before beginning their home search, which means nearly half of home buyers are missing this crucial piece of paperwork.”
The pre-approval letter shows sellers that you’re a qualified buyer, and the letter must accompany your offer to buy an Irvine home.
Right now, the Irvine housing market is hot, with inventory being arguably the biggest challenge for today’s buyers. There are a lot more active homebuyers than there are sellers, therefore things are in the sellers’ favor.
With limited inventory nationwide, homes are getting an average of 2.9 offers for sellers who negotiate, causing bidding wars.
Danielle Hale, Chief Economist for realtor.com notes:
“For ‘a buyer in a competitive market, it’s typically essential to have pre-approval done in order to submit an offer, so getting it done before you even look at homes is a smart move that will enable a buyer to move fast to put an offer in on the right home.’”
In addition, today’s housing market is also changing from moment to moment. Interest rates are the lowest ever seen.
Banks and other lenders are tightening-up their requirements so don’t delay beginning the pre-approval process – the lender may well be asking for documents you hadn’t thought of. They’ll be looking at your loan application and credit report, as well as info about your debt, work history, down payment and even your residential history.
In a competitive market with low inventory like the Irvine housing market, a pre-approval letter is a game-changing piece of the homebuying process. If you’re getting ready to buy, let’s connect before you start searching for a home.