A Common Mistake First Time Home Buyers Make

It is very common for a 1st time home buyer to not fully understand the process of buying a home. The most common misunderstanding is the importance of getting pre approved or at the very least prequalified with a lender. You can waste a lot of time if you don't know what you can afford before looking at homes.
You’ll waste your time looking at properties that are may be out of your price range. To eliminate this what you will want to do is sit down and begin to examine your budget, get a copy of your credit report and credit score, then sit down with a qualified lender to determine how much of a home loan you can afford. Don’t assume the first lender you ask is giving you the most competitive rate. Talk to more than one lender or if your working with a Realtor have the Realtor refer you to one of their preferred lenders to do some comparison shopping.

A lender or mortgage broker can give you a pre-qualification letter after a simple 10-minute phone interview. But a pre-APPROVAL letter is a firm commitment to lend money based on verification of income in the form of: employment, funds on deposit, and your credit history. All that remains is the property appraisal for you to get a home loan once you’ve been pre-approved. As you can see even though a prequalification letter is a great start, the best thing to do is provide all your documents to the lender as soon as possible in order for you to get a pre approval. This will not only help you but show that you are much stronger buyer. Why is this so important? Pre-approval is a powerful weapon when it comes to negotiating the price you want, so it’s worth it even if it takes a few days to a few weeks. It tells the sellers you are serious and they may accept your offer even it’s less than someone else’s because they know you can get financing. If you don't have a pre approval letter and you are competing on the same home with a buyer that has one, you could very well lose out on your offer.

Thank you and I look forward to speaking to you soon,
Seth