If you are planning to buy a new home, there are many things you can do first to make the process go easier for you; one of these things is getting pre-approved for your home loan. If you have not done this yet, make an appointment with a lender to do this soon. Here are four reasons why you should get pre-approved as soon as possible:
Stay Within Your Budget
When you visit a lender, they will look at your credit history, your income, and more to determine how much money they will loan you. This means they will never loan you more money than you can afford to pay back. You can then tell your real estate agent about the pre-approved loan, so they will only show you homes that you can afford.
If you want, you can go to more than one lender to do this, to make sure they all agree on the same amount. Your real estate agent can help you find a lender, if needed.
Help Your Credit
If you purchase a home that you cannot afford, you may not be able to make the payments on time each month, or you may get very behind on payments. If this happens, your home may be foreclosed, and this will show up on your credit report; it doesn't look good when creditors see a foreclosure in your credit history.
If you are not able to pay your home loan, you also may get behind on other payments as well, which affects your credit even more.
The foreclosure will stay on your credit report for seven years. This means you will not be able to get a loan with a good interest rate, so your monthly payments will be very high.
Give You Bargaining Power
Once you find a home that you like, you will have great bargaining power because you know how much you can afford.
Once you make an offer on the home, the seller or other real estate agent will see that you are approved for a loan, which makes your offer look even better. Because of this they may accept your offer, which means you could save a lot of money. Your monthly payments will also be lower if you do not pay as much for your home, and you may be able to pay the home off faster.
If you have questions, talk to your real estate agent; they can answer any questions you may have, and get you on the path to owning your new home today.Share