In today’s competitive market, there are things you should be aware of when shopping for your new home. You should expect there to be multiple offers and often, a bidding war over the property you want to purchase. Most likely, you will encounter offer deadlines and even closing cutoffs for sellers who want to close quickly. You may have to write an escalation clause, which states you are willing to up your bid to a certain number, within your offer to strengthen your chances of acquiring the home you want. If this home shopping environment sounds a little stressful, know you’re not alone. With the guidance of an experienced real estate agent and loan officer, you can arm yourself with the tools to find and purchase the home you’ve been dreaming of.
First things first, it is important to meet with your loan officer and become preapproved. In today’s market, this is essential to obtaining your dream home. Getting preapproved is different from becoming prequalified. When your loan officer preapproves you for a home loan, he or she will look at your credit history and income to provide assurances that you will be able to purchase a home within a specific range. Typically, the loan officer will provide you or your real estate agent with a letter stating what loan limit, or total purchase price, you can afford.
Sitting down for a loan consultation with you loan officer will help you understand how much house you can comfortably afford and what your payment with taxes and insurance will look like. This is the best way to plan and budget for homeownership. Getting preapproved and obtaining a certified preapproval letter from your loan officer also ensures to the agent representing you and the agents representing the sellers, that you are a serious home shopper who is prepared to make a firm offer.
Paul Girard, loan officer at Evergreen Home Loans, encourages acquiring preapproval before you start your home search. In turn you can make an educated decision and have the greatest chance of your offer being accepted and your loan approval process going smoothly. You can put yourself in a positon of strength by having a knowledgeable lender at your disposal, so make this your first step when you are considering purchasing a new home.
While the current market climate presents challenges for home shoppers, by arming yourself with knowledge, plus a real estate agent and loan officer who can provide guidance, you could be moving into your dream home in no time.