Why You Should Find Mortgage Before You Find a Home
posted in Mortgage News
Experienced mortgage brokers, financial advisors and even real estate agents will often recommend that their clients find a mortgage, before they start looking for a property to buy, and when you think about it, it makes perfect sense. After all, without the financial security of a mortgage, there’s a strong possibility that you won’t be getting a home at all.
Making the assumption that you’ll automatically qualify for a mortgage can be dangerous, and you should take whatever steps you need to before even browsing for a property, to understand whether you qualify for one. The best way to do this is by meeting with a local mortgage broker, who can help you navigate the pre-approval process.
Are you blinded by the desire to buy a home?
It’s exciting to be looking for a new home, and in some cases, it can even be of the utmost importance, but be wary of putting the horse before the cart. Focusing solely on finding the right property can mean that you neglect the mortgage approval process, and since applying for one and getting it approved can take time, it makes sense not to delay on this element of buying a home.
If you’re excited about property shopping, you have to get into the right mindset when it comes to your mortgage, as sorting out a loan before you begin trawling through property sites, can make the process less stressful and quicker, not to mention the fact that you might even save some money.
Should you get a mortgage pre-qualification or pre-approval?
Many home buyers don’t fully understand the difference between mortgage pre-qualification and pre-approval, and while both can be helpful, there is a big difference between the two.
Mortgage pre-qualification is when your chosen lender tells you how much you can potentially borrow and at what rate of interest, but it pays to keep in mind that the rate isn’t locked in, and because it’s not a comprehensive process in the same way that pre-approval is, the results may not be very accurate.
Pre-qualification isn’t an essential step to take before applying for a mortgage, but it can be helpful when budgeting for a home.
Mortgage pre-approval on the other hand, requires official documents and a fixed credit check, and the interest rate that your lender pre-approves you for, is typically maintained for up to 90 days. Pre-approval is the most accurate way of determining what you can and can’t afford when it comes to buying a home.
Finding a mortgage before you find a home may seem like a tiresome and unexciting step to take in the homebuying process, but it can save you a lot of time, effort, money and heartache, and is absolutely worth it.