It was not so long ago that there was flexibility when it came to Johnston County home searches. You could tour homes, think on it, get pre-approved, and go under contract after a week without worrying about someone coming in and scooping up the home of your dreams. Considering this is no longer the case, it is important to know why a pre approval is necessary.
Pre-Qualification vs. Pre-Approval
When it is time to talk to a lender, there are two types of letters they can write. A pre-qualification, and a pre-approval. A pre-qualification is just a generic estimate of what you can afford. When you get a pre-approval, a lender will verify your creditworthiness. You’ll need to complete a mortgage application and provide documents such as your recent pay stubs, bank statements and tax returns.
The Importance of a Pre-Approval
- Competition – The Johnston County real estate market is moving fast right now, and a pre-approval will keep you competitive and ready to make an offer when you find the right house. Many times if you submit the same exact offer on a property as someone else, and the only difference is a pre-qualification vs a pre-approval submitted, they will go with the offer with a pre-approval.
- You’re Serious – A pre-approval letter shows that you can secure a mortgage. This alone gives you an advantage over potential buyers without pre-approval, especially in competitive markets where real estate agents and sellers can be selective about whom they work with.
- Budget – By having a pre-approval, you know the maximum loan amount you are approved for. It also comes with an itemized estimate of your interest rate, monthly payment, and closing costs. Without the letter, you can estimate the amount you can afford, but by having a lender sit down and go over the details with you will make you a more informed buyer. It is an extra verification step, and gives sellers a peace of mind that the people coming into their home are qualified and not just touring their home.
Ready to Get Started?
Simply text, call (919) 813-0123 or send us a quick email if you have any questions about getting pre-approved for a home loan. Remember, having a Jaclyn Smith Properties buyer’s agent will give you a competitive advantage you need! You’ll have a knowledgable agent who has a reputation for getting you the best deal!