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Should I have the loan before trying to buy or make an offer on a home?

  • November 04 2013 - Ferndale
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Answers (9)

It is not necessary but it is always advised to at least be pre-approved before making offers on homes. It is wise to do this because offers from individuals with pre-approvals are taken much more seriously then offers without pre-approvals. Also, getting a pre-approval gives you a realistic idea of how much you can afford. Either way, I suggest you speak with a lender like myself who would be glad to speak with you to help you get the loan that you need. If you have any further questions or if you would like a loan, feel free to contact me.

Good Luck!
  • November 04 2013
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You should be pre-approved with a reputable lender.  Donna
  • November 04 2013
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Agreed with all, also when your looking at your area to buy, keep in mind the tax rates, some area's fluctuate, for example if your approved for a $1500 payment, you could by a larger home across the highway because the tax rate is lower...it is always best to know your guidelines of how much you can spend before you find your dream home that is overpriced of what you can spend.

Also, keep in mind, an offer that is uncomfortable to make, is generally the best offer to make!  Saves you the most amount of money...without low balling of course!

Anytime you need help give us a call
3-D Realty
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  • November 04 2013
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Absolutely!  There are a number of reasons:

1)  The lender plays a critical role in your home purchase.  They are a must in determining how much home you buy.  You may qualify for a much higher amount than you want to pay in a monthly payment.  Share that with them.  Tell them what your housing budget is per month.  They will then let you know what purchase price you should not exceed in order to arrive at that payment.  They will let you know if you can afford "more" and what your payment would be if you chose to go up.  They can tell you where you max out so you do not start looking at homes that exceed your budget.  You want to start your search below your max price and work up.  Not the other way around. 
2)  They will help you determine how much money you will need out of pocket for closing costs and down payment.  If this poses a problem for you (not a lot of available liquid funds) they will help you look at programs that might be applicable to your situation that can help, or gift funds may work.  Or, you may need to let your real estate agent know that you'll need the Sellers to contribute to your closing costs.
3)  With a pre-approval, your real estate agent has much more bargaining and negotiating power.  Sellers want their deals to close.  They do not want to lose marketing time.  They feel much better knowing that a buyer has spoke with a lender and has had their financial situation reviewed by a professional who now just needs to qualify the home (appraisal and home inspection). 
4)  The lender I use not only will give a pre-approval, but they will give a CERTIFIED PRE-APPROVAL.  That certificate when accompanying my contract and earnest money is a HUGE factor in being the winning offer.  Sophisticated sellers are much more smitten on a well qualified buyer who will close than a high dollar amount buyer who had not even started the process.  Too much risk and loss of valuable marketing time.

Get the preapproval!
  • November 04 2013
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It is best to get a preapproval letter from your bank so that you know how much you can get on a loan to buy a home, you will also need this prior to writing an offer anyway. But it would not be wise to obtain the actual loan before purchasing.
  • November 04 2013
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It is recommended to get pre-approved by a lender before starting your search for a new home. Doing this will ensure that you will be looking in the correct price range and when you find a home you like you will be able to move forward with your offer.
  • November 04 2013
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Profile picture for Robert McArtor
Ask your lender for a qualification letter stating the amount you qualify for. This will help you and your REALTOR when searching for homes and if you decide to place an offer on a property. After the offer is accepted, you then follow through with the loan application.
  • November 04 2013
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Profile picture for JustinLeffew
It's not possible to secure a loan before having an accepted contract but as James said, it is best to be Pre Approved before making an offer. This will not only give you the confidence of knowing you'll be able to obtain financing, but also you will be able to know what each offer you make will cost you monthly as your mortgage payment.
  • November 04 2013
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It is probably best you get pre-qualified for the mortgage so you know not only how much you may qualify to borrow, but also your total payment which typically includes not only the principal and interest, but also the taxes and homeowner's insurance for your total monthly figures.
Your loan officer will also help you with down payment figures and closing costs. Feel free to contact me to go over such figures with you.
Best wishes, Jim
  • November 04 2013
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