What happens when you walk into a restaurant and, after placing your order, you reach down and realize that you don’t have any money? You’re not going to get your food, right?
Well, the same thing is true for buying a home. Without the money to buy the home, you can’t buy it.
This is why the very first thing that you must do when entering the market to buy a home is to make sure that you have enough money to buy one. Most people don’t have enough cash to buy a home outright, so they get a mortgage loan from a lending institution (bank).
Getting pre-approved to buy a home means having a lending professional review your financial situation. You will be approved for a loan of a certain amount of money based upon your income, debts, expenses, credit score, etc. Once you have been pre-approved by the bank, you then know what your price range is so that you can begin to look for houses that you can actually afford. Online estimate tools are helpful but typically not very accurate.
Getting pre-approved is a requirement for buying a home. In fact, every real estate sales contract is contingent upon the buyer being able to get financing. The pre-approval letter is proof that the buyer will be able to get said financing, and actually perform on the contract (buy the house). If you make an offer that is not attached with a lender prepared pre-approval letter it likely will not even be considered as a legitimate offer. Not getting approved, and, therefore, not being prepared to purchase a home, can cost you a lot of time and prevent you from getting your dream home – it can even end up costing you thousands of dollars.
At Stello Homes, we have partnered with local lenders in order to make the pre-approval process as simple as possible for our clients.
Have you been pre-approved for a loan yet? If not, please let us know and we would love to get in touch with a lender for you.
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