Mortgage Pre-Approval Is A Good Start
Buying a home can be an exciting prospect, and it's easy to get caught up in all the fun details like the size of the backyard and kitchen upgrades. But before you start visiting open houses and booking viewings, you might want to head over to your bank and talk about how much you can actually afford to spend on your new home. Getting pre-approved for your mortgage is the best way to prepare, before you start looking for a home and definitely before you make an offer to buy. Here are a few benefits to knowing exactly how much you can afford before you begin shopping:
1) You Won't Fall In Love With More House Than You Can Afford.
The trouble with shopping for a home without getting pre-approved, is that you may end up looking at homes that are way out of your price range. If that happens, you may find it difficult to see the benefits of smaller, less expensive homes. If you look at realistically priced homes right off the bat, you will compare these homes to other homes in your price range and not to homes that are out of your league. Once you find the perfect home, pre-approval means that you will be ready to make an offer as soon as you find the right home.
2) It Eliminates Unnecessary Stress.
Searching for a house that you love, is available for purchase, is located in your desired neighbourhood and then successfully making an offer before it gets bought by someone else, is stressful enough. You don't want to be worried about whether or not you'll get approved for financing and be able to afford the mortgage payments. Securing a pre-approved mortgage first helps relieve that particular stress.
3) You Will Be Able To Negotiate Confidently.
By knowing you are purchasing within your means, you will make an offer and engage in the negotiating with confidence. Also, when you submit an purchase offer, the seller is more likely to give it serious consideration because you have solid financial backing. It could even be the factor that gets your offer accepted over a buyer that needs to secure financing.
4) No Delays In Financing.
Your lender will need a copy of the accepted offer so they know what house you are buying and the purchase price. They will likely order an appraisal and give you the final approval on the home. Having a pre-approved mortgage will avoid having to wait longer while they determine your financial viability.
5) You Will Know Your Monthly Payment.
There are a lot of costs incurred when buying a home, aside from the down payment. There is the house inspection, home appraisal, title insurance, a portion of the year's property taxes, legal fees and the Property Transfer Tax. Getting a pre-approved mortgage will give you an idea how much you will be spending on a home and you can work out your maximum monthly mortgage payments, which will help you manage your money.
The bottom line is this; when it comes to buying a house, you don't want anything to stand in your way or ruin your chances of successfully finding and purchasing the home of your dreams. Take some time right away to get your financial "ducks in a row" by finding out how much money you will be able to borrow in order to purchase your home. The last thing you want, is to find the perfect house, fall in love with it, make an offer, have it accepted and then have the sale fall through because your lender denies your mortgage application. Go into the process with eyes wide open and have a pre-approved mortgage so that you know exactly what kind of house you can afford and can search accordingly. That will free up all your energy to start worrying about how you are going to decorate your new house!