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In a tight real estate market, having a pre-approval letter in your hands could be the difference between getting your dream home… and not.
The number of homes on the market is low nationwide. This means you could be competing more for the home you want. This means you have to be ready to act when you find the right house. Having a pre-approval letter is key. So what is it? And how do you get it?
Find a Lender
The first step you need to take is finding a reputable lender. A lender can be known by a few names including mortgage broker or mortgage officer. Essentially, this is the person who is going to be orchestrating your home loan.
“This person will need a list of documents from you to prove that you’re a safe bet for a loan,” says Winster Ceballos, Sales Associate at ERA Justin Realty. These documents can include pay stubs, bank statements, and any proof of investments. If you need help finding a reputable lender, an experienced real estate agent like Ceballos can give you a recommendation.
Once your lender has all of your necessary paperwork, they can issue you a pre-approval letter.
What is it?
A pre-approval letter is proof that you can get a mortgage and how much your lender is willing to loan you to buy your future home. “This figure is based on your personal finances, including annual income and how much you can pay in a down deposit,” says Jennifer Darby Metzger, Broker/Owner of ERA Justin Realty, “Print it out or keep it as a file on your phone ready to send to the seller’s agent when you find the right house.”
What it does
“Having a pre-approval letter shows that you are a serious buyer,” says Ceballos, “If you find yourself in a multiple bid situation, having that pre-approval letter could give you a heads up over your competition.” With higher mortgage rates and home prices impacting affordability for buyers right now, a letter shows a seller he or she will not have to waste any time waiting for you to get approved for a mortgage.
Realistic Expectations
For buyers personally, knowing how much house you can afford can help narrow your scope and make sure your expectations are realistic. If you’re ready to buy a home but don’t know where to start, Winster Ceballos or any of the knowledgeable real estate professionals at ERA Justin can help you. Give us a call at (201) 939-7500.
