June is National Homeownership Month, and it’s peak real estate season here in the Pacific Northwest. As the weather warms up, it’s a great time to buy or sell a house. Because most families want to move before the kids start school again in the fall, more listings pop up in the summer.
For buyers, this means the house hunt is on. To ensure your best chance of scoring your dream home, I highly recommend getting pre-approved for a loan up front.
What is Pre-Approval?
A pre-approval letter from a mortgage lender indicates that a buyer is really serious, and that the sale is more likely to go through. Pre-approval means the lender has checked your credit and verified your documentation to approve a specific loan amount, usually for a period of 90 days.
Why is Pre-Approval so important?
Closing on a house usually takes at least 30-45 days, even for buyers who are prepared. Sellers don’t want to risk wasting valuable time on a buyer who may not end up qualifying for the loan.
In our market, housing inventory is lower than buyer demand, so competition is fierce. If you’re not ready to put in an attractive offer right away when the right home comes along, you could miss out in the bidding wars.
When should you get Pre-Approved?
When you’re ready to start your home search, talk with a lender early on. Pre-Qualification is less formal and can help you establish a budget range, and it’s a good first step. But when you’re serious about finding your dream home, get that Pre-Approval letter.
Discussing your finances with a stranger might feel uncomfortable at first, but it’s in your best interest to know your buying power ASAP. This will help you be prepared to jump on a great listing as soon as it goes on the market.