You've taken all the early steps. You're scouring online to find that perfect home, looking for the right realtor to help you seal the deal, and you're even planning out where you'll put all of the furniture. The good news is that there's a ton of information out there for home buyers, and the prospect of buying a home is super exciting.
However, you shouldn't go in blind. The best way to prepare yourself for homeownership is to get your pre-approved loan before ever even considering a home. This will make it that much easier for you to get the house of your dreams. In this post, we're going to look at three super important reasons why you should get a pre-approval on your mortgage.
Avoid Window Shopping
- Many people will go about looking for a new home in all the wrong ways. They'll do their research but then not get a pre-approval mortgage or loan.
- This is effectively window shopping. Even though they think they're looking at a home within their means, many realtors won't look at someone's offer unless they're pre-approved.
- It's common and understandable to leave something like your pre-approval letter till later in the home buying process. What this does, though, is put you behind other buyers that took the initiative.
Your Credit Matters
- It's common for people to assume that friends and family who are homeowners with similar credit scores can be seen as a model for the new home buyer. However, even a slight difference in credit can affect your chances of getting that house.
- Even if you have a slightly lower credit rating, having a pre-approval letter is going to put you ahead of home buyers who have better credit but no letter. This letter effectively shows that you are reliable; what realtor doesn't like that?
- Getting family to cosign on a loan can be useful, but beware that you pay off that loan in a timely and reliable fashion. If you don't, your family member can be left to foot the bill and will probably have their credit lower in the process. If you can get that pre-approval on your own, you'll be in a much better position.
Maintain Your Credit's Health
Okay. Let's say you've done everything according to plan; you've gotten your pre-approval letter, conferred with your realtor, and everything's looking good. What should you then do in the meantime?
- Well for starters, you should definitely not open any new lines of credit for yourself. This will adversely affect your standing and definitely won't make you look good in the eyes of the banks or the realtors.
- Along with not opening any new lines of credit, you should definitely address the lines of credit you already do have. By making sure that nothing's delinquent and you're paying all of your bills on time, you'll continue to look good and in the process increase your chances of getting the home of your dreams.
Along with not opening any new lines of credit, you should definitely address the lines of credit you already do have. By making sure that nothing's delinquent and you're paying all of your bills on time, you'll continue to look good and in the process increase your chances of getting the home of your dreams.