As with any big decision in life, they say you will know when the time is right to begin looking for a new home. You'll start feeling that pull toward the online listings, and begin obsessively browsing photographs of houses currently on the market. When you make the decision to go for it, you might be left wondering where to start. Frankly, the best place to begin your search for a new home is in your lender's office. We recommend that every buyer starts the process with a pre-approval.
What is Pre-Approval?
Pre-approval is the process of working with a mortgage lender in order to find out what type of loan you are qualified for and how much money they can lend you. It is based on your current credit score, your financial background and the amount of money you have available for a down payment. Essentially, pre-approval means that your lender is confident that you will be qualified to secure a mortgage on the property you intend to purchase. Once you have been pre-approved, your lender will provide you with a letter that you can present to sellers when you make an offer on a home.
How Do You Get Pre-Approved for a Mortgage?
Pre-approval begins with a meeting with your lender. Contact your preferred lender ahead of time, and talk to them about the documents that you should bring to this meeting. Documents they might request include your tax returns, your W-2 forms, proof of any assets that you have, proof of income, your driver's license and your social security number. Your lender will provide you with information about the amount you will be able to mortgage, but it's important that you have an idea of how much money you can spend on a monthly payment. Discuss your budget restrictions with your lender, and together you can find a mortgage amount that is right for you.
Why Should You Begin The Process of Buying a Home with a Pre-Approval?
The bottom line is, real estate agents and sellers will not take you seriously if you have not been pre-approved. Many agents require their home buyers to get pre-approved before they begin searching for homes. In addition, the current San Antonio market is considered a seller's market. Most properties receive multiple offers in a matter of days, and sellers won't even consider an offer from a buyer who has not been pre-approved. Pre-approval gives you the information you need in order to make the right financial investment in a home, and also gives confidence in your ability to finalize the purchase.
With a pre-approval in hand, both your real estate agent and the seller's agent know that you are a serious buyer who is committed to purchasing a new house. As you begin your house hunt, you should remember a few of these simple tips:
- Stick within your budget. It's too easy to fall in love with a home that you cannot afford, so don't go looking at houses that are out of your price range. Be ready financially.
- Identify several must-have features, and keep them in mind when considering any properties. Choosing two or three important features will help you focus and narrow down your search.
- Search for homes based on neighborhoods. The one thing you can't change is location, so you will want to choose a house that is in a desirable location.
Check out this post for more tips on buying a home in the booming San Antonio market. If you have any questions about pre-approval or searching for a home in this area, then contact Liz Petroff today. She's an expert real estate agent who is passionate about finding her clients their dream home!