At Aspire Los Angeles, we work with a lot of first time homebuyers, so we are often asked how you can have an edge as a first time homebuyer. One of the most important things we always recommend is to get pre-approval for your mortgage before you start house hunting. In a competitive housing market like Los Angeles, pre-approval has many benefits and will ensure you can get into your dream home.
The Difference Between Prequalification And Pre-Approval
Before we get into the reasons you should get pre-approved for a mortgage before house shopping, it’s important to understand the difference between prequalification and pre-approval. Prequalification is when the mortgage lender gives homebuyers an estimate of what they could afford based on their information. While pre-approval means the mortgage has reviewed all of the information and approved the lender for the estimate. Though pre-approval is not a loan, it can speed up the loan process.
The Five Benefits Of Getting Pre-Approved For Financing
There are many benefits to mortgage pre-approval including:
1. Pre-Approval Helps You Understand What You Can Afford:
Mortgage pre-approval helps you understand just how much house you can afford. This makes it easier for you to target the homes that are in your price range so you can house hunt more efficiently.
2. Pre-Approval Increases Your Negotiating Power:
When you’ve been preapproved for a mortgage, it essentially gives your offer more clout. In many cases, sellers will accept a lower offer from a buyer they know has the money. Therefore, you’ll have a higher chance of getting the home you want for less.
3. Pre-Approval Makes The Home Buying Process Move Quicker:
Getting a mortgage is a lengthy process. Getting pre-approval cuts this time down in half and shortens the amount of time it takes to close on your new home. Getting pre-approved means you’ll be able to get into your new house quicker.
4. Pre-Approval Gives You A Competitive Edge:
Los Angeles is an extremely competitive housing market and having pre-approval means that you’ll be able to make offers as soon as you find the home of your dreams. In a seller’s market, where there is a shortage of houses, having the ability to move quickly on a home means that you’ll be able to beat other buyers to the punch.
5. Pre-Approval Makes Buying A Home Less Stressful:
There are so many stressful situations getting pre-approval can help you avoid. Pre-approval really streamlines the home buying process so there aren’t any hiccups along the way.
So before hunting for your new house, talk to your mortgage lender. If you’ve never been through the pre-approval process before, don’t worry. Our experienced and helpful agents s can help you understand the process and get you into the home of your dreams in no time!