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🏡Home searching can be exciting, emotional, and frustrating, especially in todays real estate market, so preparation is essential. Upon first meeting, I like to get a feel for what my new client is looking for in a home, where they want to be, what their timeframe to move is, and I always, ALWAYS ask if they have been pre-approved. If the answer is no, I provide my client with a few names of lenders I have worked with who have provided exceptional service, and most importantly, gotten us to the closing table. The lack of available homes on the market make it imperative that you ready to go when the right home comes along, and the pre-approval means we can move forward looking at homes with piece of mind that you have been given preliminary financing approval.
📝What is a pre-approval? A pre-approval is a letter is issued by a lender after they have deemed you qualified to buy, which is included in your offer to purchase a property to show the seller your are financially capable of completing the sale. Most real estate agents have several lenders they work with on a regular basis, so they can be a great source for putting you in touch with a few lenders to compare loan products. Once you make application (usually quickly on line) the lender will check your credit, ask for your income, debts, employment history, and where you will be looking. Once the lender determines what you can afford, they will give you a sales price range to look in, let you know whether or not you will need to ask for seller assistance, a rough estimate of your principal and interest portion of your monthly payment, and tell you to go shopping! Once you zone in on a property and start preparing an offer, the lender will ask for the property address and the property tax information so they can give you an approximate monthly payment to include the taxes and hazard insurance. Fun fact; your monthly payment is broken in to four parts: principal, interest, taxes, insurance. These combined four parts make up the entire monthly payment. Another fun fact: you can make additional payments on your principal to pay down your loan faster, but I’ll get in to that in a future post😉.
🎉What happens if you submit an offer on a property and your offer is accepted? If your offer is accepted, it’s a relief, but not quite time to celebrate yet, you have got about thirty to forty five days for things to come up before you close. There are probably property inspections to be done, appraisal to be completed, and many requests from the lender to provide them with documents and or clarifications on things such as employment timeline, student loans, and maybe that car loan you co-signed for your brother you forgot about because he pays the bill. Assuming all is well with inspections, appraisal, and nothing has changed credit or with employment, you can expect to close and be in your now home in about thirty to forty five days!
🤨What happens if your offer is not selected? Your pre-approval can be used for the next offer. You are shopping for a home and it can take time! You will not have to have a credit check each time you submit. In general, the pre-approval is good for around three months. If you are looking longer than three months, the lender will update accordingly.
If you made it through my entire first bog post, congratulations, and thank you! ❤️ If you would like to find out more about the purchase process, or speak to me directly, please feel free to reach out at any time. I am always available to answer any real estate question you may have.
Cheers!
Joanne
