Most of us dream of owning a home. Once you’ve found an ideal home to purchase though, it can feel like you’re in a race to get ownership of it, especially if there are a lot of other homebuyers who are also interested in the same home. To finish ahead of everyone else and be in a better position to gain ownership, start with a pre-qualified.
Pre-qualifieds offer the following key benefits:
- Save you money/costs as your purchase offer doesn’t have to start as high
- Show you have financial backing/support
- Ensure fixed/secured interest rate for up to 120 days
Pre-qualifiactions provide you with an advantage over other homebuyers, bargaining power with sellers, and sponsorship (in the form of a financial backer). If a competing homebuyer isn’t pre-qualified and you are, the seller will consider you over the other person because a bank has agreed to loan you money, which puts you in a more favourable light with the seller.
Sellers and real estate agents will also be more inclined to negotiate with you because you’ve taken real financial steps to show that you’re serious about purchasing a home. It’s a big deal when a lender commits to giving you a loan as it shows that you’re stable from a financial perspective (a.k.a. low risk). Because you can afford to buy the home and handle payments, the lender is willing to guarantee you a fixed interest rate for up to 120 days, which is another advantage to you as a new homeowner.
Use A Mortgage Broker
To help you along even further in the race to own a home, consider using a mortgage broker. They act as knowledgeable coaches, guiding you smoothly and quickly towards your goal of homeownership. It takes some time and knowledge to prepare a mortgage application. They can use their expertise and relationships with various lenders to speed up this part of the process.
Another key benefit of working with them is that they only check your credit once during the process. If you did it on your own your credit would be individually checked by each lender. Every check causes your credit score to drop, reducing your chances of getting a mortgage.
Getting a pre-qualified enables you to determine what home you can afford to buy and what the associated costs will be. Essentially, you’ll be able to plan everything in more detail from this point onward. And from there, you can race ahead more confidently and efficiently, and start taking real steps towards your dream of homeownership.