Why Pre-Approval Should Be Your First Step

Once you decide you’re ready to buy a home, it may be tempting to simply start shopping for your dream home. And while it certainly doesn’t hurt to begin the process of looking for neighborhoods and considering your options, your best first step in the process is to get pre-approved for a mortgage.

 But first – what is a pre-approval? It’s a preliminary approval for a home loan based on your credit history. It’s not the actual loan but rather the confirmation of how much you can borrow. It looks at more than just what money you have available to spend each month and factors in your credit score, payment history, and how much debt your have versus your income. It’s a very useful for not just the homebuyer – but also for real estate agents and home sellers. Here’s why.

What makes home loan pre-approvals so great is that they are also so easy – at least at Crystal Clear Mortgage.

Getting pre-approved helps set your budget
When you get pre-approved for a home loan, you get a clear picture of exactly what you can afford to spend for your next home. It may be more than you anticipated. Or it may be less. Either way, it gives you a defined scope of what you can borrow – and therefore spend – for your home purchase. And you should keep in mind the fact that it’s often best to not spend up to the maximum pre-approved amount but to rather leave yourself some room in your budget for unforeseen expenses and other goals.

 Pre-approval helps you narrow your search
Once you know exactly how much you can spend based on your home loan pre-approval, you are able to really zone in on the homes that truly fit your budget. Maybe your mortgage pre-approval opened up the opportunity to buy into a more expensive neighborhood that would make for a better investment. Or maybe it revealed that you need to tone down your expectations just a bit. Either way, a mortgage pre-approval can help you focus on a narrower price range so that you don’t waste your time on viewing homes that aren’t right for you.

It gives you credibility
Finding the home of your dreams – and knowing you can truly afford it – is an amazing feeling. And it’s equally amazing for the home sellers, who can take confidence in the fact that you have the buying power you need to enter into a purchase contract. Sellers are more likely to negotiate with pre-approved buyers. This is because sellers don’t have to worry about pre-approved buyers “busting” – or backing out of – the purchase contract at the last minute due to loan qualification problems.

Contact us today to start your own dream home pre-approval.


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