The housing market has weathered the storm and in many areas around the country is even starting to get hot!
As home prices continue to climb, many properties are seeing multiple offers or even bidding wars — and that means potential buyers need an edge.
That’s where a solid mortgage pre-approval comes in.
Though the market is heating up, credit is still tight, so a pre-approval provides home buyers a number of advantages over those with mortgage pre-qualifications – or nothing at all.
Here’s why it’s essential to get pre-approved.
Pre-Qualified vs. Pre-Approval
So what’s the difference between getting pre-qualified and getting pre-approved?
After all, they sound a lot alike — but the difference is significant.
A pre-qualification is based solely on what a potential buyer discloses to their mortgage loan officer about their finances, credit history and assets, as well as how much cash they’ve got on hand for a down payment.
In a perfect world, their word would be enough, but in the real world… not so much.
In contrast, a pre-approval requires a mortgage loan officer to review a buyer’s financial documents, including taxes, credit rating, bank statements and proof of income and assets.
In other words, all of the things that indicate a potential buyer has the resources they need to purchase a home.
In today’s market, buying a home can sometimes feel like a game of Risk; buyers need to marshal every possible strategic advantage they can to get the upper hand.
It’s always best to enter the home buying negotiation process from a position of strength, and pre-approvals provide just that.
Of course, current market conditions play a role, as well: When the market is strong, sellers can pick and choose which buyers they want to negotiate with — and the buyers that have been pre-approved for a mortgage tend to look a heck of a lot more attractive than those who aren’t.
Think of it this way: If the seller has multiple offers, are they more likely to accept the offer that’s dependent on the buyer’s ability to obtain financing – or the offer that comes with a mortgage pre-approval certificate backing it up?
Seems like a no-brainer.
Time is Money
In addition to increasing buyers’ bargaining power, pre-approvals also save everyone time.
A mortgage pre-approval provides a clear picture of how much house they can afford.
This streamlines the home searching process, so buyers won’t waste their time — or sellers’ time — looking at homes they simply can’t purchase.
Plus, once the buyer finds that perfect home, the financing process is already well underway, which speeds the process along.
Getting pre-approved offers so many benefits, it’s hard to see why all buyers don’t jump on this opportunity.
Beginning the pre-approval process within 60 days of the intended purchase significantly increases buyers’ advantages throughout the home buying process, from house hunting to the negotiation table.
Call HartWest Financial at (480) 596-5151 or email for a personal refinance consultation on your home.