Start off your new year with a new home by getting your loan pre-approval and preparing to purchase. A new year means a new start, and a sparkling home awaits.
Our real estate agents understand that the pre-approval process can be rather confusing. To start off your new year right, we're here to help guide you through this first stage of the home purchase process.
Knowing your credit score is a great place to start when deciding if you are ready for a pre-approval. Lenders will have varying minimum credit scores, but for the most part, you'll need a score of at least 620 to ensure you are approved for a loan.
In the process of reviewing your credit, its a good idea to inventory both your debts and your assets. This is information that your lender will need to know, and it also helps you make the decision if you're ready to apply for pre-approval. Exactly how much of a down payment you need will be largely based on your market, but 20% down is a good target to shoot for when planning your purchase budget.
Pre-approval lets sellers know you're serious. Real estate agents and sellers often favor offers with pre-approvals, since this means the chances of the sale being finalized are better than simple pre-qualification offers.
While there is definitely a strategic reason to get pre-approved before you start viewing homes, there is also an emotional one. Finding the home of your dreams and then losing it due to a finance delaying can be a terrible feeling. You'll want to make sure your offer is ready when you find the right place, especially in hot markets.
While there is no specific time you must apply for pre-approval, it makes life easier if you do so during the month you'd like to make your offer. The reason for this 30-day guideline is that pre-approvals expire, usually within 60 to 90 days. Getting your pre-approval within a month to month and a half of your approval window gives you extra "wiggle room."
Pre-approvals expire because financial situations can change quickly, such as the loss of a job or an unexpected medical emergency. It's true that you can get pre-approved more than once, but many people find this an unwanted bit of extra paperwork and another inquiry on their credit. Get your pre-approval when you're ready to start home shopping!
Why wait to get started on that new you? Contact us today to learn more about loan pre-approvals and finding a home that's the right fit for you.