Buying a real estate Edmonton entails a long and sometimes complicated process, especially for first-time buyers. Many first-time would not consider getting a mortgage pre-approval crucial in their home purchase. But those who know better would put it on top of their recommendations. Here’s why:
Gives Lenders Assurance That You Can Buy a Home
While others can purchase a residential home in cash, most of us lean to lenders and banks to buy our first residential home. In this case, having a mortgage pre-approval plays a vital role.
The pre-approval letter can persuade lenders that you can pay while assuring home sellers of your qualification and interest in purchasing. It also allows sellers to see how you are planning to pay for the purchase.
A mortgage pre-approval does not guarantee borrower’s anything, but it increases his chances of receiving home offers since a lender has already verified his financial capacity.
Helps You Gauge Your Purchasing Power
By acquiring a mortgage pre-approval, you don’t only get proof of your financial capacity; you can also estimate your purchasing power. You might think you can afford a townhouse in a gated subdivision just because you have a permanent and good-paying job, but your bank account and credit score could say otherwise.
Having been pre-approved also narrows down your choices to only those you can afford. It also gives you a glimpse of the possible monthly payment you could be paying.
Acts as a Negotiating Tool
When you get pre-approval, you can get a hold of current interest rates for up to three to four months. This could be an advantage, especially in the ever-changing real estate market, which can see prices fluctuate in no time.
Having a pre-approval letter also raises your chances to get better prices and terms of payment since you can prove that you can afford to buy a home. This is an excellent negotiating tool that could save you from the stress of having to wait for home offers – which may never come.
With all the financial backing that comes with a simple pre-approval letter, you can be sure that sellers will happily negotiate with you since they know that the deal will in no time fall through.