Buying Your Dream Home

Dated: 10/11/2017

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Imagine walking in to a home for sale with a big bag full of money, plunking it down on the kitchen counter and saying, Image title"Ok, here's the cash. I've got it. Where's the keys? I'm ready to move in."

Imagine the confidence, and the increased enjoyment of viewing homes, knowing that you could easily buy any house that you looked at. Paying cash would mean the ability to negotiate price, terms, conditions, potential repairs, and closing date are favorable. A home seller receiving your offer would take it that much more seriously knowing that you are a ready, willing, and able buyer.

Ok, so that's all well and good. What if you're not able to pay cash for a house?

While there are many buyers out there that can pay for a home with all-cash, many find themselves obtaining financing to buy a home. Knowing that you are in a position that will require that you speak with a lender to secure financing, it makes all the sense in the world to speak with someone, and obtain a pre-approval letter, PRIOR to viewing any houses. In other words, first the loan, then the home.

It's important to note that a pre-qualification is NOT the same as a pre-approval. Pre-qualification is the lender stating based on cursory information, you would be qualified to purchase in "x" budget. The problem is your credit may not have been pulled, or your income may not have been verified, and once that is done, the budget can change.

A pre-approval is a more comprehensive approval, where credit, income, and assets are verified and chances of obtaining a loan in the budget are much greater.

With this pre-approval as a buyer, you can save yourself the grief (and potential disappointment) of looking at houses that you can't afford, and instead have the confidence knowing that you're looking at houses that are in your price range: like viewing houses if you had a bag full of money! If you find a great house, and find out later that it's out of your price range, it might prove difficult to find another house that will compare.

With pre-approval, you'll also put yourself in a better position to make a serious offer when you do find the right house. If a home seller has the choice of looking at two offers, one with a pre-approval letter, and one that doesn't include a pre-approval letter, the one with the pre-approval letter documents that the buyer is able to buy, and has a winning edge over the other offer.

Don't have a bag full of money to buy a house? Speak with a lender and get a pre-approval letter. That way, you can confidently view homes in your price range so that when you find the perfect one, you can say, "I've got it!" and go ahead and make the offer.

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