By now I’m sure you’ve heard the news that we are currently in a seller’s market. But what does this mean for the housing industry? Basically, it means that there are more homebuyers in the market than there are homes for sale. Based on the laws of supply and demand, this means that there is heavy competition, and you’re more likely to end up in a bidding war. However, there is one thing you can do to ensure that you are a step above the rest when entering this type of situation. Get preapproved first, with Homestead Funding Corp.
What does it mean to get preapproved? A mortgage preapproval is a commitment from your lender stating how much they would be willing to lend you after evaluating your financial situation. Before you look at homes, a Licensed Loan Originator will review your financial documents, including your credit report, pay stubs, bank statements, and the past two years of W-2s, and have an underwriter review and approve the loan terms. A preapproval should speed up the loan process significantly and will make you and your offer much more attractive to many sellers.
Having a preapproval letter demonstrates to the seller and seller’s agent that not only are you serious about purchasing, but also that you’ve already been preapproved to purchase a home in a certain price range. Buyers with prequalification letters may also be qualified to purchase but if a seller is deciding between a preapproval offer and a prequalification they will choose the buyer with the preapproval letter assuming all other terms are equal.
As we move further into 2017, the housing industry is continuing to be a seller’s market. Buying a house will continue to be competitive, but you’ll be sure to succeed so long as you’re prepared. Arm yourself with the proper tools—an experienced Realtor, a lot of research, and a willingness to be flexible—and most importantly, prove to sellers that you’re serious by getting preapproved prior to shopping.