Normally sellers pick cash buyers over buyers that need to use financing. This is because there is less risk of the deal falling through if for some reason the buyer is unable to qualify for a mortgage loan. If you need to use a loan and want to be able to compete effectively with cash buyers, it is HIGHLY RECOMMENDED that you get a pre-approval (NOT just a pre-qualification) before you start to look for a home. This way, when you find the home you want to buy you are ready to make a quick competitive offer.
A pre-approval will help you in the following ways:
You won’t waste time considering homes you cannot afford. Or you may be able to afford a better home than you think!
You will get a much better idea of the costs involved in buying a home and the money you will need for a downpayment.
A seller may be more willing to negotiate with you as a pre-approved buyer because they know that your financing is secured. You are almost like a cash buyer, which will make your offer more competitive.
You can take your time and select the best type of loan for your particular situation.
How much home can you afford? There are 4 key factors to consider:
The funds that you are able to put as downpayment. Did you know that some lenders require as little as 3%?
Your ability to qualify for a mortgage – your income, your credit score and your debt-to-income (DTI) ratio.
The closing costs associated with your transaction.
- Prevailing mortgage interest rates.
To start your loan pre-approval call/text 843-900-0155 to get a list of recommended local lenders.