header photo Charleston 12/16/2015 6:40:08 PM
News / Real Estate

Home Buying Tips: Get Pre-Approved Before Home Shopping by Greater Charleston Properties

Why you should get Pre-Approved with a mortgage lender before looking at properties

Why should you get pre-approved with a mortgage lender before looking at properties?

What is the difference between Pre-Approved vs Pre-Qualified?

Buying a home can be overwhelming, especially if you're a first time home buyer. But it doesn't have to be. Let our experts guide you in the home search and buying process to take some of the pressure off. You would hate to walk into the grocery store without your wallet. It's the same with buying a house.

Loan Applications Are Boring

You're right, they can be. But they are necessary to help you achieve your goal. Buyers often prefer the warm fuzzies of hopping in the car to look at homes over paperwork. Picturing how your loveseat or grandma's antique rocking chair will fit into a living room is much more fun. BUT, getting pre-approval from a lender shows sellers that you are serious in a competitive market, especially when inventory is low.

No Pre-Approval, Offer Rejected

Lots of buyers send over offers and skip the pre-approval process. But they also get rejected all the time from sellers because the buyer doesn't have a pre-approval letter from their bank or lender. In today's market, you must get a real pre-approval where a lender has verified not just your credit, but bank statements, pay stubs and tax returns.

So What IS the difference between Pre-Approval and Pre-Qualification?

Being pre-qualified means the lender has relied on info supplied by the buyer to only give an estimate of how much the borrower could qualify for. Being pre-approved means the lender has verified the borrower's information and documentation to determine exactly how much it would be willing to lend to that borrower. A budget! Pre-approval will give you a max price you can afford to buy a house, and thus help you refine your home search so that you don't go looking at houses you cannot afford to buy.

Be Brave, Face Your Loan Reality

Many people drag their feet on the loan application process because they're afraid a lender won't approve them for the amount they want to spend to buy a house. This is like not going to the doctor for fear of finding out what's wrong with you. But finding out sooner is better, even if it means you have some more saving or some credit repair to do for a bit! The difference between a 680 to a 700 credit score can majorly affect a person's ability when it comes to down payment. Just because your friend or neighbor bought a house that has a similar credit score to yours, doesn't mean you'd qualify for the same loan amount. Positioning yourself to have the best buying power will help you obtain the house you want that you can afford and send a serious message to sellers.

No One Else Can Approve You For A Loan

Often times, buyers think they qualify for a certain mortgage amount because a friend, family member or neighbor may have a similar credit profile. It's to your advantage to seek advice from a real estate agent (us!) in the early stages of buying a home so that you are fully prepared and educated in the process. It's also highly recommended that you speak with a local lender because lending guidelines for the area you are purchasing are often different than the bank you may use in your city, especially if you are moving from outside the area.

Getting a pre-approval BEFORE you shop gives you an accurate picture of what things you may need to do first in order to get your credit and finances in the best possible shape to buy. Let us help you get started today on your home buying process. Greater Charleston Properties is the top Charleston real estate team that will guide you every step of the way. We'll even match you up with our preferred mortgage lender to get the best financing advice and lending options.

Contact us today at 843-631-2463843-631-2463 or email info@charlestonrealestate.properties