This is an article from the Washington Post, By Jon CoileJon Coile, chairman of Rockville-based multiple-listing service MRIS, writes occasional commentary on the Washington area housing market’
WHY BEING PREAPPROVED FOR A HOME LOAN MATTERS
Markets move faster todayWith online listings and so many real estate resources available to buyers and sellers, it’s easy to get a property in front of the world. Buyers aren’t waiting on a call or fax from their real estate agent like they did in the 1980s. Instead, motivated buyers get push notifications from Zillow/Trulia or texts from their agents and see homes from virtual tours. Transactions happen at the same speed. If you’re not approved for a mortgage when you make an offer, the seller risks waiting weeks to see if your loan will go through and will likely not even accept your offer if you do not send them a pre qualification letter. Show that you’re pre-approved, and you’ve eliminated one huge red flag for the seller and their agent.
Know what you can affordPeople today are focused on their monthly payments more than the total purchase price. Why? Because, unlike the typical buyer a generation ago, many of today’s buyers don’t plan on staying in their homes for 30 years. Instead, they can commit to 7 to 10 years and are open to alternate mortgage options that could save them money on their monthly payments. It’s helpful to know exactly what a $250,000 mortgage will cost vs. a $500,000 mortgage on a monthly basis. Also, in some parts of the country, (like Arizona) there are options for FHA loans with as little as 3.5 percent down. Knowing all your options before you start shopping allows you to shop and buy smarter. There’s no sense looking at homes in the $400,000 range if you can afford less, and vice versa.
Competing with pre-approved buyersFew buyers today get into the real estate market without creating a relationship with a local lending professional. It’s smarter to have your ducks in a row. In a hot market, you may see multiple offers on one property. If you don’t have a pre-approval letter to go with your offer, you won’t have a chance of getting your offer accepted. Not being pre-approved means you aren’t a serious buyer in the eyes of the seller and their agent.Getting pre-approved means organizing all your tax and work related documents, documenting your income, debt and credit, and understanding all the loan options available to you. There should never be a cost to be pre-approved for a loan. And you aren’t committed to a mortgage when going through the pre-approval.
Chris Grenko epitomizes integrity, dedication and creativity in every detail of your Real Estate transaction. Chris grew up Chicago and began his sales habit at the age of 11 selling the local newspa....