What is Needed?
If you’re ready to make your dream of owning a home a reality, you’ve probably heard about the importance of getting pre-approved for a mortgage. Now, let’s break down what this actually involves! When you're pursuing a goal as significant as homeownership, being thoroughly prepared is essential.
Pre-qualified & Pre-approved?
Navigating the seas of home loans? 🏠 Let's clarify the difference between pre-qualification and pre-approval! Pre-qualification is like a first glance at what you could borrow for your dream home, based on your finances and a credit check. Pre-approval, though, is the real deal, a strong signal that your creditworthiness is solid, even without a home picked out yet. Both steps are your allies, ensuring you have the right papers in hand when you're ready to sail. Thinking of starting the home-buying journey? Reach out, and together, we'll chart the course to your future doorstep!
Make it stand out
So, you’ve found the perfect house and you want to make an offer on it. There’s just one little problem: you want to buy it for more than you were pre-approved for. Is it possible to buy a house for more than your pre-approval?
The short answer? Yes.
You can offer more than what you’ve been pre-approved for. But, you’ll need to back that offer up. For the mortgage to work, you have to make up the difference between the amount you’re pre-approved for and the amount that you offer.
Typically, buyers in this situation will add the amount over their pre-approval to their down payment. For example, if you were pre-approved for $300,000 and you want to offer $310,000, you’ll need to add $10,000 to however much you’re putting down.
You can also ask your loan officer if it’s possible for you to qualify for a larger loan amount. They’ll work with you and your agent so you can buy your dream home.
Benefits of Getting
Pre-Approved
Before you embark on your house-hunting journey, one crucial step can set you up for success – getting pre-approved for your mortgage. Here's why it's a game-changer:
Budget Clarity: Knowing your budget upfront will allow you to focus on homes within your financial comfort zone.
Swift Closing: Pre-approval can streamline the closing process, helping you move into your new home sooner.
Negotiation Edge: Sellers take pre-approved buyers seriously, giving you an edge when it's time to negotiate.
Lock-in Rates: You might have the chance to lock in favorable rates, protecting you from potential market fluctuations.
Peace of Mind: House hunting is more enjoyable when you have the confidence that financing won't hold you back.
Quick Response to Market Opportunities: Being pre-approved means you can act swiftly when you find the right property, giving you an edge in fast-moving markets.