Buying a house is a very exciting time, and it’s difficult for most potential home buyers to stop themselves from jumping right in and looking at property listings. However, getting pre-approved for a mortgage is one of the most important points to consider when beginning your home search.
It is only natural to want to start looking at houses immediately, but if you get pre-approval first, the remainder of the process will be much simpler.
Here are five reasons why you should get pre-approval before you start house hunting.
1. You’ll become realistic
How can you look at property for sale when you don’t actually know what your real price range is or whether or not you will actually get approved at all? Falling in love with a home that exceeds your price range could cause significant heartache, so avoid this by obtaining pre-approval before you begin.
2. It saves time
While it’s fun to search listings and attend inspections, this generally all involves work for the various associated professionals such as real estate agents, buyers agents etc. And it’s also wasteful of your own time to be looking at properties you might not be able to afford.
3. It makes you a serious player
Having a pre-approval in place will make you look much more organised. Also, in today’s market, some real estate agents have been known to be unwilling to show potential buyers any properties until pre-approval is in place. When it comes time to make an offer on a property, you will be taken much more seriously in the eyes of a vendor if you can show pre-approval. In fact, your offer may be more attractive to others because the sellers will know you’ve already secured a mortgage.
4. You’ll reduce your risk
If you enter into a contract on a property without pre-approval you could be placing yourself at risk. Firstly, getting a mortgage approval may take time and it may push back your ability to close if you don’t already have pre-approval. Secondly, if you fail to get approved for a mortgage after entering into a sales contract you may end up losing the deposit you gave.
5. It speeds up the process
Having pre-approval before entering into a sales contract will make the process much more streamlined. You will already have a point of contact with your lender via your broker. Your broker should also have already discussed with you what documentation you’ll need to provide. And, having already gone through the underwriting process, you will be able to close the deal in no time.
Remembering these reasons why you should seek pre-approval before house hunting should save you time and potentially avoid heartache when searching for a new home.
To discuss more about obtaining pre-approval for your next house purchase, you can contact the team at Zippy Finance on 1300 855 022 or email [email protected].
Have you sought pre-approval before looking to purchase a house? Or are you flying by the seat of your pants and plan to buy first? We’d like to hear your reasoning in the comments section below.
More on real estate…
