How to Get Preapproved and Start Shopping for Your Perfect Home
When looking to purchase a home, it’s essential that you begin the search early. Doing so gives yourself enough time to arrange finances and secure an appropriate mortgage.
The initial step in buying a home is getting preapproved by a lender. This will let you know how much money is available and provide an idea of your monthly payments. It also gives you an estimate for how much house you can afford, helping narrow down your search and making informed decisions.
When applying for a preapproval loan, you’ll need to submit your income, debts and credit score. You may even have to undergo an income audit and other verifications. To expedite the process of gathering these documents ahead of time, organize them into folders or on your phone.
Be prepared to answer a lot of questions and provide explanations for any financial discrepancies your lender uncovers during the application process. This could take days or even weeks depending on your individual financial situation and case complexity.
One of the primary advantages to getting preapproved is that it helps you circumvent potential mistakes in your mortgage application. Unfortunately, about one-third of mortgage applications contain errors which could result in higher interest rates and damage your credit score.
When purchasing a home, whether it’s your first or fifth, it is wise to shop around for lenders who provide good customer service and competitive rates. A qualified lender will assist in finding a loan program that fits within your budget and financial objectives, as well as provide advice on avoiding costly errors and cutting down on home-buying expenses.
Once approved, you can lock in your mortgage rate until closing on the home or until it expires (usually after 60 to 90 days). Be sure to read all details carefully though as many lenders offer preapprovals for only a certain period of time.
Once you receive your preapproval letter, it’s time to go house hunting and search for a home with confidence. If you find a property that meets both your needs and is priced within your preapproved range, then you can confidently move forward with purchasing.
Before you begin looking at homes, create a list of the features you wish in your new house. This will help narrow down the options that are best suited for your family’s needs and wants.
Once you’ve identified a house that meets your criteria, the next step is to make an offer on it. But remember: stay flexible during negotiations and be willing to budge if you don’t absolutely adore a particular property.
You’ll need a deposit to close on the home, and having extra funds for closing costs can help you stand out from other buyers and make your offer more desirable to sellers. With extra cash, it may be easier for you to beat out other bidders and secure the property you desire.