A friend recently asked me that question. She said she wanted to look at a house, but the real estate agent showing the home wouldn't let her even look at it without a mortgage pre-approval letter. She asked me, "Is this true?" the short answer is yes, many real estate agents won't show you a home without having a pre-approval letter. With so many homes on the market today and interest rates as low as they are, it's definitely a buyer's market. While this is good news for buyers and their real estate agents, it also means there's a lot of folks simply window shopping who haven't talked to a lender yet. So let's look at what mortgage pre-approval is, and why it's a vital step in the house hunting process.
Why should I ger pre-approved for a mortgage? It's a good question. Below you'll find a few quick reasons you ought to get your mortgage pre-approval before you go house hunting.
- You'll be a more powerful buyer. When you have a letter stating you can afford a house, you're seen as a better buyer. Plus, if you were to get into a bidding war with another buyer, the seller will more likley take you more seriously than someone who hasn't talked to a mortgage consultant.
- You'll be better equipped to win the 'Interest Rate' game. It's a fact of the financial world: interest rates go up and down. Talking to a mortgage consultant about mortgage pre-approval will position you to be ready to lock in an interest rate before they fluctuate too much. A lower interest rate will save a lot of money over the life of that mortgage.
- You'll avoid credit surprises. Mortgage pre-appvoal helps reduce the risk of credit surprises once you move into the full application process. You'll be able to take care of credit score issues and other debt long before you take on a mortgage payment. Getting pre-approved will help you head-off surprises so you can go look for the perfect home.
You can hear more about the mortgage pre-approval process from mortgage expert Jay Eakins in the video below.
You can also see the video here: What is Mortgage Pre-Approval?
Learn more about the home buying process with this free eBook specifically geared towards first time home buyers. Get your copy of "The Essential Guide to Buying Your First Home" at the button below. You can also get pre-approved here.
Question mark: Flickr user Marco Bellucci)