Joe Migliaccio Blog

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Why Get Pre-Approved For A Home Loan?

Most first-time home owners forget to get pre-approved before going and talking with a real estate agent. The thought of owning their first home gets them caught up in the fantasy and they forget to do their homework. They are excited to start researching their new home that they forgot to find out what properties they can afford or if they are even eligible to get a home loan.

There are many reasons to get pre-approved for a home loan but the main reason is that it is going to save you a lot of time and heart ache. When you know what kind of house you can afford , it will help you temper expectations when you are researching potential homes. Knowing your price range will help keep your mind and emotions on track with your financial budget.

Even if you know your price range but haven’t got your pre -approval yet, you are still shooting yourself in the foot. When you find the property and you want to buy it but don’t have a pre-approval, the real estate agent or seller won’t accept your offer because they are not 100% certain that you can actually afford that home. Now you must go back to your financial lender and get the pre-approval document. During this time someone else might come in and make a better offer than yours and you lose out on the property you were looking to buy.

Being pre-approved can be your biggest tool in negotiating a deal for your new home. Showing the sellers that you have the money to buy the home will give you the leverage to purchase your new house. If you are lucky you might be able to get a lower price on the home because none of the other bidders have a pre-approved document from their lenders.

Overall, it is important for you to take the time and speak with your financial lenders so they can get you pre-approved for a home loan. It will give you the jump start you need to buy the house of your dreams.
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Three Important Steps When Trying To Get A Home Loan

If you are trying to purchase your new home, there are three important things to consider before you start talking with real estate agents and sellers. Most people get carried away with the fantasy of owning their new home and forget to take the necessary steps that are needed for anyone trying to purchase a new home.

1. Understand Where You Are At Financially
Being able to understand your finances and be able to put a realistic price range on what you can afford is very important when trying to get a home loan. You will need to know what your annual income is, so you can figure out what is a feasible monthly mortgage payment. There is nothing worse then finding your perfect home and then realizing later that you can’t afford to live there.

2. Get Pre-Approved By Your Lender
Getting pre-approved by your financial lender is a very important, and an often missed step by first time home owners. Taking the time to talk with your lender and giving them all the information they need to get you pre-approved will save you a lot of time and headaches. What most people do not realize that having a certified document that says you are pre-approved is your negotiating power when you make an offer on a house. If you do not have this document, you cannot make an offer on that home because the seller and real estate agent do not know if you actually have the capability to receive a loan of that size. What happens sometimes is people forget to get pre-approved and try and make an offer on a home and then have to go back to their lender to get that document and by the time they try to make a serious offer the house has been bought from under them.

3. Start Researching Real Estate
Doing your due diligence on real estate properties will give you and your real estate agent the ability to find you the right home. If you understand what your loan size is going to be, will give you the price range on homes to research. Another big part is knowing the size and type of home you are going to want to live in. Understanding if you want to live in the city or in a rural area will help narrow down a location. Figure out how big of a house you will want. Do you or your family need two or three bedrooms? Is having an extra bathroom going to be worth the price? These are questions that you need to answer before trying to get a home loan.