Did you know? On average, Americans spend more time researching their next vehicle purchase and vacation options than researching mortgage lenders. In fact, a recent survey found that 72% of prospective home buyers have not shopped around for, nor have any plans to shop around for, their mortgage. By not shopping around for your mortgage, you could end up costing yourself tens of thousands of dollars over the lifetime of a mortgage. With housing affordability at its lowest point in decades due to high home prices and skyrocketing interest rates, it is more important than ever to shop around for your mortgage.
A pre-approval is better than a pre-qualification
If you have ever looked into obtaining a mortgage for a home purchase, then you likely have heard about the pre-qualification or pre-approval process. Although both are utilized by home buyers during their home search, a pre-approval entails a more rigorous review of your finances than a pre-qualification does. In addition to a credit check, you will likely be asked to provide some documentation confirming your income, assets, and debts, etc…
On the flip side, a pre-qualification is a written statement from you lender stating the loan amount you would qualify for according to that lender’s guidelines. It should be noted, however, that this determination is often based on self-reported income and credit information. Therefore, a pre-qualification is not a guarantee that you will get a mortgage.
As you might expect, nearly 90% of sellers surveyed stated that they prefer buyers that are pre-approved for a home loan as opposed to simply pre-qualified. The additional scrutiny required for a loan pre-approval gives sellers the peace of mind that the buyer is more likely to close on time. For buyers, a pre-approval allows them to make a stronger, faster offer as soon as the right home hits the market. In addition to a local and knowledgeable real estate agent, buyers should also have a knowledgeable mortgage broker as part of the team as well.
Are you in the South Florida area looking for assistance with buying or selling real estate? We can help! Contact Natasha at Live South Florida Realty, Inc. today! Also, be sure to download our free Florida Home Search app as well.