If you’ve been planning to buy a home this year, then you might have heard of the term “pre-approval” being thrown around and that’s because it’s a necessary step to take before starting your journey as a homeowner. But, have you ever wondered why that’s the case and how come pre-approvals are so important?
Well, the truth is, getting a pre-approval letter from your lender is critical, and can give you an advantage from your competitors (other buyers) in so many ways.
To better enlighten you on why it’s important to know what “pre-approval is”, Freddie Mac defines the process like so:
“A pre-approval is an indication from your lender that they are willing to lend you a certain amount of money to buy your future home. The lender you work with will provide you with a pre-approval letter, which is an official document that states the maximum amount they are willing to lend you, . . .”
In simple terms, pre-approval from your lender helps your get an idea of how much you can realistically afford and how much you can borrow for your loan. That makes it easier for you to put a bar on your search for homes. And since you have an idea what you’re approved for, it’ll also be useful when it’s time to submit an offer on the home of your dreams.
You should take every advantage you can gain as buyer in this market that been drastically changing. It’s really crucial that you do this so that your offer does not get lost in the sea of other offers, especially those who have been pre-approved also. To do this, you’re going to need the guidance to navigate these new waters, so another important factor is to have a team of professionals on your team, such as a real estate advisor and a trusted lender. They’ll make sure to put your best foot forward.
Pre-approval for a mortgage gives you a better understanding of how much you can borrow and shows sellers just how serious you are about purchasing their home. Let’s connect so you have the tools you need to succeed as a homebuyer in today’s shifting market.
If recent headlines about rising inflation are making you wonder if it’s still a good time to buy a home, here’s what the experts say.
Housing Is an Asset That Typically Grows in Value
Ali Wolf, Chief Economist at Zonda looks at housing as an asset. She stated that “If you have cash and are expecting inflation, you want to think through where you can put your money so it does not lose value. Housing is commonly looked at as a good inflation hedge.”
Your Mortgage Helps Stabilize Your Monthly Housing Costs
Senior Wealth Management Reporter at Bankrate, James Royal, said “A fixed-rate mortgage allows you to maintain the biggest portion of housing expenses at the same payment. Sure, property taxes will rise and other expenses may creep up, but your monthly housing payment remains the same. That’s certainly not the case if you’re renting.”
Buying Protects You From Rising Rents
Natalie Campisi, Advisor Staff at Forbes said “Homeowners are shielded from mounting rental prices because their cost is fixed, regardless of what’s happening in the market… Tangible assets like real estate get more valuable over time, which makes buying a home a good way to spend your money during inflation times.”
If you’re thinking about buying a home, experts say owning a home is historically a good hedge against inflation.
Let’s connect if you’re ready to start the homebuying process today.