5 Reasons You Should Get a Mortgage Pre-Approval Before Heading to the Market
Sep 22, 2022 / Buying
If you’re gearing up to buy your next home, getting pre-approved for a mortgage before you head to the market is a great idea. While not mandatory, it can give you a big leg-up throughout the entire home buying process.
While a pre-approval doesn’t guarantee that you will qualify for a mortgage, it’s often an accurate indicator of where you stand financially. Pre-approvals are backed by a contract from a lender and are based on an in-depth analysis of your personal finances.
If you’re thinking about starting your home buying journey, here are five reasons you should get pre-approved for a mortgage before you begin house-hunting.
1. You Can Budget Correctly
Most importantly, a mortgage pre-approval can help you establish what you can reasonably afford to spend on a home. By determining a maximum lending amount, you can build out a more complete budget for buying. Not only can this help you narrow down your house-hunting search, but it also reduces the risk of overpaying or submitting an offer on a home you can’t afford.
2. Peace of Mind
The process of buying a home comes with many variables. From changing interest rates to seasonal market shifts and competition from other buyers, there’s a lot more that goes into it than simply finding a home and making an offer.
By getting pre-approved for a mortgage ahead of time, you’ll have one less major stressor to worry about during the busy buying process. With a comprehensive understanding of how much you afford, you can enter the market with confidence and make your home search more efficient.
Budgeting is an essential part of the home buying process. Check out these blog posts to learn more about saving for your next home.
3. You’re Locked-In
One of the most important details to consider when building out your home buying budget is interest. Interest rates will have a huge impact on your monthly mortgage payments and can be the difference between paying off your mortgage comfortably and landing yourself in financial hot water. Interest rates fluctuate often and can change substantially overnight. Getting pre-approved for a mortgage can protect you from interest rate increases while you’re finding the perfect home.
With most Canadian lenders, you can lock in a set interest rate for up to 130 days once you’ve been pre-approved. This can prevent you from having to adjust your budget in the middle of house-hunting if interest rates rise.
4. It Shows You’re A Serious Buyer
Getting pre-approved for a mortgage shows sellers that you’re serious about buying their home. In a popular housing market like Vaughan, it’s not uncommon for sellers to receive multiple offers on their homes. Getting pre-approved is a strong way to have your offer stand out from other buyers. It tells sellers that you’re qualified to buy their home and won’t back out of the deal due to budget concerns.
As a buyer, if you want to find success on the market you’ll also want to work with an experienced real estate agent. Not only does getting pre-approved for a mortgage impress sellers, but it can also show agents that you’re serious about entering the market. A pre-approval could also be the difference between working with a highly-reputable buying agent and working with someone new to the industry.
Looking for more helpful first-time home buyer tips? Check out these blog posts.
- A Beginner’s Guide to Real Estate Negotiations
- The Top 5 Mistakes Home Buyers Make
- How to Write a Winning Offer Letter
5. It’s Risk-Free
The best part of getting pre-approved for a mortgage? There’s practically zero risk. In most cases, obtaining pre-approval is free. That’s right – free!
You’re also not required to commit to your pre-approval. After you’ve been pre-approved, you have no obligation to lend. It’s totally up to you to decide if you wish to use it – no strings attached.
Anxious about buying a home and then having second thoughts? Click here to discover how our Buy Back Guarantee can remove the risk from your home purchase.
When Should You Get Pre-Approved?
The best time to apply for a mortgage pre-approval is when you’re ready to begin your home buying journey. Ideally, that means before you even begin browsing listings. Having a mortgage pre-approval in your back pocket the moment you enter the market can make your buying process less stressful and bring in better results!
Where Can You Get Pre-Approved?
Most buyers opt to work with their existing bank or shop around with a mortgage broker. If you don’t know where to get started in obtaining a preapproval – that’s ok! As trusted real estate agents in the Vaughan area, we can connect you with reputable lenders and brokers to help you get pre-approved. Get in touch today.
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